Antitrust Law Daily Wrap Up, ANTITRUST NEWS: EC to Conduct In-Depth Investigation of Aegean Airlines’ Acquisition of Olympic Air, (Apr 24, 2013)

The European Commission (EC) is investigating whether Aegean Airlines’ proposed acquisition of Olympic Air will impede effective competition in Europe. The EC announced yesterday that it has concerns that the transaction between the two main Greek airlines offering air transport services on Greek domestic and international routes would grant the combined entity a monopoly or other strong market position on several domestic Greek routes out of Athens, leading to price increases and poorer service.

The EC’s initial market investigation revealed that the combined entity would have a monopoly on the routes from Athens to Chania, Santorini, Mytilene, Corfu, Alexandroupolis, and Kos, while on other routes where the two airlines now compete with Cyprus Airways the transaction would remove an important competitor. Moreover, the investigation indicated that Cyprus Airways, the two airlines’ largest competitor, may not be a viable competitor in the Greek domestic market in future. The investigation also did not disclose any indications that entry of new competitors would occur on a scale and within a timeframe capable of constraining the combined entity. Commitments proposed by Aegean during the initial investigation did not resolve these concerns.

The EC previously prohibited a proposed combination between the airlines on January 26, 2011. In the current investigation, the EC is examining market changes that have occurred since that decision, including the state of the Greek economy and the financial situation of the parties.

"We have the duty to ensure that Greek passengers and people visiting Greece can travel at competitive air fares, even more so during challenging economic times," said Joaquín Almunia, Commission Vice President in charge of competition policy."

News: Antitrust