Brussels, 09/10/2013 (Agence Europe) - As expected (see EUROPE 10936), on 9 October, the European Commission gave the go-ahead to the acquisition of Greek airline Olympic Airways by its rival Aegean Airlines. The Commission's investigation showed that Olympic Airways would have folded in any case due to its precarious financial situation, leaving its rival as the only supplier of domestic Greek air services, so competition would have disappeared with or without the merger.
Although it vetoed an initial merger plan between the same companies in 2011, the European Commission has given the go-ahead to the plan notified on 28 February 2013 due to changes in the two companies' situation and the Greek air travel market. As a result of the economic crisis, demand for domestic Greek flights has shrunk, and in 2011 Olympic became a regional, rather than national, airline with far fewer planes and passengers than before. The number of Greek domestic routes where Olympic overlaps with Aegean is now seven, rather than 17, five of which are only served by the two companies in question. The Commission found that it was highly unlikely that other airlines would be interested in these routes in the short-term due to lack of profits. Moreover, other than Aegean, no credible third party exists that is interested in buying up Olympic and its assets due to the company's dire financial straits.
The Commission therefore concluded that any damage to competition as a result of Olympic's disappearance as an independent competitor would not be caused by the merger itself as it would have happened anyway. As a consequence, the merger is compatible with the internal market and must be authorised. (FG/transl.fl)