The European Commission on Wednesday cleared Aegean Airlines’ takeover of failing Greek rival Olympic Air which risked closure if the deal did not go through.
A review showed that “Olympic Air would be forced to exit the market in the near future due to financial difficulties if not acquired by Aegean,” the Commission said in a statement.
“Once Olympic would be out of business, Aegean would become the only significant domestic service provider,” it said.
“Therefore, with or without the merger, Olympic would soon disappear as a competitor to Aegean … the merger causes no harm to competition that would not have occurred anyway.”
The Commission, the EU’s executive arm, had rejected a 2011 takeover bit by Aegean on the grounds it would limit competition but Olympic’s fortunes have since declined further.
Olympic was once the top carrier and supported by the government for many years but as Greece nearly collapsed under a mountain of debt, state funds dried up.
Privatized in 2009, “it has never been profitable since,” the Commission said, noting that domestic passenger numbers out of Athens plunged 26 percent between 2009 and 2012.
When it blocked Aegean’s previous bid for Olympic in 2011, the two airlines provided competing services on 17 routes but now there was overlap on only seven.
Aegean offered 72 million euros for Olympic, controlled by the Marfin investment group which has made clear it would not put any more money into the business. AFP