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 behavior.
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. 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
quasi-monopoly 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.
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 does 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,
with a deadline on June 7, 2013. The second phase II
investigation concerns the proposed acquisition of a
roaming technologies company Mach by its rival Syniverse,
with a deadline on May 30, 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. The deadline here is September 6, 2013.
Aegean Airlines executive Vice Chairman, Eftichios
Vassilakis said “recent adverse developments in our
region contribute to the unprecedented recessionary
environment and further intensify the requirement for
the creation of a Greek carrier with adequate scale, so
as to be competitive, viable and able to support the
local economy.
“We appreciate the time, effort and resources that DG
Comp Services have dedicated and will continue to
dedicate in this process. We will continue to cooperate
constructively with them so as to achieve the required
synergies while safeguarding consumer interests. After
all Aegean has already responded to consumers needs in
Greece by reducing its average domestic fare by over 25%
relative to 2009, despite substantially higher fuel
prices”.
Remedies already offered or currently under discussion
are confidential. However, as the Greek people have been
severely affected by the now four year old unprecedented
crisis, it is important to note that among several other
commitments offered or under consideration, Aegean
Airlines has also proposed price policy commitments in
the domestic routes that would be affected by the
transaction.
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