EUROPEAN COMMISSION
PRESS RELEASE
Brussels, 23 April 2013
Mergers: Commission opens in-depth investigation into
proposed acquisition of Olympic Air by Aegean Airlines
The European Commission has opened an in-depth investigation under the EU Merger
Regulation into the proposed acquisition of Olympic Air by Aegean Airlines. The companies
are the two main Greek airlines offering passenger air transport services on Greek
domestic and international routes. Each of the companies operates a base at Athens
International Airport. The Commission has concerns that the transaction may lead to price
increases and poorer service on several domestic Greek routes out of Athens, where the
merged entity would have a monopoly or an otherwise strong market position. The
opening of an in-depth inquiry does not prejudge the outcome of the investigation. The
Commission now has 90 working days, until 3 September 2013, to take a decision on
whether the proposed transaction would significantly impede effective competition in the
European Economic Area (EEA).
Commission Vice President in charge of competition policy Joaquín Almunia said: "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."
The Commission’s initial market investigation indicated that the proposed transaction
raises serious competition concerns on a number of Greek domestic routes where Aegean
and Olympic currently compete or are well placed to compete. These routes are used not
only by Greek passengers, but also by a large number of foreign travellers, given the
popularity of Greece as a tourist destination.
The Commission's assessment takes account of relevant factors, such as the state of the
Greek economy and the financial situation of the parties. However, the investigation so far
showed that the proposed acquisition would give the merged entity a monopoly on the
routes from Athens to Chania, Santorini, Mytilene, Corfu, Alexandroupolis and Kos, to the
detriment of ticket prices and service level offered to passengers travelling on these
routes. On other Greek domestic routes where both airlines operate alongside Cyprus
Airways (i.e. from Athens to Thessaloniki, Heraklion and Rhodes), the transaction would
remove an important competitor.
Moreover, the Commission's investigation provided indications that the two airlines' largest
competitor, Cyprus Airways, may not continue to act as a viable competitive force on the
Greek domestic market in the future. Finally, the Commission's initial market investigation
revealed no indications of entry prospects that would occur on a scale and within a
timeframe capable of constraining the merged entity and disciplining its pricing behaviour.
The commitments proposed by Aegean during the preliminary investigation did not
address these serious competition concerns.
The Commission will now investigate the proposed acquisition in-depth to determine
whether its initial concerns are confirmed or not.
IP/13/361
Background
On 26 January 2011, the Commission prohibited the first proposed combination of Olympic
Air and Aegean Airlines in case M.5830 (see IP/11/678) In that case, the Commission
found competition concerns on 10 Greek domestic routes out of Athens, with a quasimonopoly on nine of these routes and a loss of potential competition on one route. As part
of its current investigation, the Commission is examining the changes in the market
circumstances that have occurred since the 2011 decision.
Aegean is a Greek airline providing air transport of passengers and, to a more limited
extent, cargo services. Since 1999, Aegean has been offering scheduled flights on Greek
domestic routes and international short-haul routes. It operates a base at Athens
International Airport. It currently serves approximately 53 international and domestic
short-haul destinations. Aegean is a member of the Star Alliance.
Olympic is a Greek airline active in air transport of passengers and cargo. Like Aegean,
Olympic operates a base at Athens International Airport and currently serves
approximately 45 short-haul destinations, mainly within Greece. Olympic does not belong
to any airline alliance.
Merger control rules and procedures
The Commission has the duty to assess mergers and acquisitions involving companies with
a turnover above certain thresholds (see Article 1 of the Merger Regulation) and to
prevent concentrations that would significantly impede effective competition in the EEA or
any substantial part of it.
The vast majority of notified mergers do not pose competition problems and are cleared
after a routine review. From the moment a transaction is notified, the Commission
generally has a total of 25 working days to decide whether to grant approval (phase I) or
to start an in-depth investigation (phase II).
There are currently three other on-going phase II merger investigations. The first one
examines the proposed combination of Munksjö and the European label and processing
business of Ahlstrom, in the paper industry (see IP/12/1338), with a deadline on 7 June
2013. The second phase II investigation concerns the proposed acquisition of a roaming
technologies company Mach by its rival Syniverse (see IP/12/1439), with a deadline on 30
May 2013. The last ongoing phase II investigation was opened in March into the proposed
acquisition of Shell's Harburg refinery assets by Nynas of Sweden (see IP/13/290). The
deadline here is 6 September 2013.
Press contacts :
Antoine Colombani (+32 2 297 45 13, Twitter: @ECspokesAntoine )
Marisa Gonzalez Iglesias (+32 2 295 19 25)
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