EC blocks Aegean/Olympic merger on monopoly grounds

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Olympic Air's proposed merger with Aegean Airlines has been blocked by the European Commission on monopoly grounds.

The EC says it made the decision because the merger would have created a "quasi-monopoly" in the Greek air transport market.

"Together the two carriers control more than 90% of the Greek domestic air transport market and the Commission's investigation showed no realistic prospects that a new airline of a sufficient size would enter the routes and restrain the merged entity's pricing," says the EC in a statement.

Olympic and Aegean had offered to shed some take-off and landing slots at Greek airports in a bid to gain EC approval for the deal.

However, the EC points out that Greek airports "do not suffer from the congestion observed at other European airports in previous mergers or alliances".

Aegean chairman Theodore Vassilakis says the decision means that "an important opportunity for a consolidated representation in the European aviation market has been lost".

He adds that Aegean will "adjust and continue". The airline plans to consult with its advisors to decide on "possible further actions within the framework of existing legislation".

Aegean and Olympic signed their tentative merger deal last February.