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Airline Merger Blocked

Greek carriers to appeal EU ruling

Mar 02, 2011

Two largest Greek carriers, Olympic and Aegean, to appeal EU ruling that blocked their plans to merge, the airlines said on Wednesday.

Reuters reports that in January, European Union regulators blocked the proposed merger of privatised Olympic and Aegean Airlines, on grounds the tie-up would result in higher prices for consumers.

"Olympic together with Aegean will turn to European Courts against the EU Competition Commission's decision," Olympic said in a statement.

Aegean and Olympic, which control more than 90 percent of Greece's air market, last year agreed to merge to form a stronger airline, better able to cope with recession at home and competition with European peers.

But the EU watchdog said they had not offered sufficient remedies to ease competition concerns.

According to Reuters, the carriers had offered to cede take-off and landing slots in Greece, but the Commission ruled this was not enough as Greek airports do not suffer from the levels of congestion affecting others in Europe.

Olympic and Aegean rejected suggestions to give up part of their fleet or one of their two brand names to new entrants.

The former ailing state carrier Olympic was sold to Marfin Investment Group (MIG) in 2009.

The two carriers' agreement to merge no longer stands, following the EU decision, Aegean's vice chairman Eftyhios Vassilakis told Reuters on Wednesday.

"The EU decision was founded on a wrong basis. We will appeal it to complete the legal aspect of the case. Right now there is no deal with Olympic, the agreement is dissolved. But the EU's decision can affect what may unfold in the distant future," Vassilakis said.

Olympic also said it would stop flying to Vienna, London, Paris and Brussels as part of strategy adjustments but would add flights on domestic routes.

Greek carriers to appeal EU ruling
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Source: Reuters

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