EU grounds proposed Aegean, Olympic Air merger

European Commission competition authorities on Wednesday blocked a proposed merger between two of Greece?s largest airlines, Aegean and Olympic Air (OA), on the grounds that it would create a monopoly.

“This would have led to higher fares for 4 out of 6 million Greek and European consumers traveling on routes to and from Athens each year,» the European Commission said.

Europe’s competition watchdog rarely uses its veto on mergers. The last time it blocked one was in 2007, when it barred Irish low-cost airline Ryanair from taking over national competitor Aer Lingus.

The Greek tie-up would have led to a near total domination by the new airline between Athens and Thessaloniki, and between the capital and eight island airports, the Commission added.

The two carriers would have had control of more than 90 percent of the Greek domestic air transport market in a deal announced in February last year.

In response to the decision, Aegean and OA said they will consult with advisers before deciding whether to appeal.

?An important opportunity for a consolidated representation in the European aviation market has been lost,? said Theodore Vassilakis, chairman of Aegean Airlines, in a statement.

Shares in Aegean Airlines were up 1.41 percent in mid-session trade in Athens, at 2.16 euros, while Marfin Investment Group, which owns OA, had gained 2.94 percent to 0.70 euros. The broader market was up 1.67 percent.