EC opens antitrust probe into Aegean/Olympic merger

Aegean A320.

The European Commission said it has "opened an in-depth investigation under the EU Merger Regulation" into the planned Olympic Air/Aegean Airlines combination, stating that its initial inquiry into the deal found that "serious competition concerns" could arise.

Aegean MD Dimitris Gerogiannis recently told ATW that the merger with Olympic "is a viability issue," asserting that the Greek market can't support both carriers (ATW, Aug. 1). Olympic owner Marfin Investment Group agreed earlier this year to merge Olympic with Aegean (ATW Daily News, Feb. 23).

EC said in a statement that its preliminary look at the planned merger led it to have "serious doubts as to the compatibility of the transaction with the [EU] Merger Regulation." It noted that the new company, to take the Olympic name, "would have very high, if not monopolistic, market shares on all domestic routes and on a number of international routes where both parties operate."

The new Aegean/Olympic is slated to be listed on the Athens Exchange. Olympic Handling and Olympic Engineering will be wholly owned subsidiaries. Aegean majority investor Vassilakis Group and Marfin will be equal partners in the venture.

The EC said it has until Dec. 7 "to take a final decision on whether the merger would significantly impede effective competition in the European Economic Area or any substantial part of it."

Joaquin Almunia, EC VP in charge of competition policy, said the EC "must make sure that consumers and businesses will continue to have a competitive choice of airline services in Greece, both as regards fares and routes." The EC emphasized that the "decision to open an in-depth inquiry does not prejudge the final result of the investigation."

Aegean this summer became the 28th member of Star Alliance (ATW Daily News, July 1).