ECONOMY

Airline merger still not cleared for takeoff

Aegean Airlines, Greece’s biggest carrier, and Olympic Air are still facing «some difficulties» in their efforts to overcome antitrust concerns over a planned merger, the European Union’s competition chief said yesterday. «We have still time, weeks, ahead of us, to find an adequate solution,» EU Competition Commissioner Joaquin Almunia told journalists in Brussels. «If we cannot find a solution that will avoid competition problems, we will react accordingly.» The airlines want to merge to better compete with foreign rivals, but the combined carrier would dominate Greece’s domestic market, with a fleet of 64 aircraft and a work force of 5,850. The European Commission, which launched an in-depth investigation into the bid in July, has until January 12 to decide on the plan. Almunia said the case had similarities to Irish airline Ryanair’s takeover bid for rival Aer Lingus in 2007, which was blocked due to concerns it would create a monopoly. The regulator had then cited inadequate concessions offered by Ryanair. Carriers typically give up airport slots or provide access to their frequent flyer programs, among others, to secure approval by competition authorities. Buyout firm Marfin Investment Group (MIG) bought Olympic last year, despite a higher Aegean offer, because of Greek government concerns that the EU competition watchdog might block a combined Aegean-Olympic deal. The agreement between the two airlines, which jointly control 95 percent of Greece’s air travel market, to merge was announced in March. Shares in Aegean Airlines dipped 2.39 percent to 2.04 euros on the Athens bourse yesterday, while MIG retreated 3.08 percent to end at 0.63 euros. The broader market gave up 1.97 percent.