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The merger of Olympic Air and Aegean Airlines does not seem to suit the Euro-leaders in Brussels. The report of the European Commission on the case should have been announced on December 7, this year but it was postponed to January 12, 2011. The European Commissioner for Competition Joaquin Almunia said in a speech in Brussels in the day of global competition that the big problem with this merger is that the two airlines controll almost entirely the domestic air market in Greece. He stated the deal between the Olympic Air and Aegean Airlines is similar to the Air Lingus – Ryanair deal in Ireland, which his predecessor Neelie Kroes rejected several years ago.

Joaquin Almunia did not hide his concern that the possible merger of the two major Greek airlines will distort the free market and competition forming a huge monopoly in the field of air transport in Greece. The latest data show the two companies held a total of about 95% of the operating lines in the country. Almunia stressed that if the two companies complete the merger transaction they should guarantee that the consolidation will not affect consumers.

After initially announcing the merger decision in the first months of this year, the merger contract had to go for approval in the European Commission - Competition. The Commission decided on July 30 this year that the issue should be examined in more detail and required further study. The first of the three main issues the Commission noted, of course, is the risk of monopoly on domestic flights. This could lead to cuts in destinations, such as to remote Greek islands, which may not be popular tourist destinations but this will block the movement of local population. The third problem is related to the management of ground control and shipboard personnel.

The laws in force in the European Union stipulate that one company has a dominant market position when it controls 40% of the flights to specific destinations, while 70% mean dominant position or monopoly. The management of Olympic Air and Aegean Airlines said that the transaction continues regardless of the delayed decision of the European Commission – Competition. Senior managers of both airlines stressed that advisory procedures with the competent authorities in Brussels have been undertaken to make room for new players in international flights, which are currently being dominated only by Olympic Air and Aegean Airlines.

Meanwhile, the Greek government has taken into serious consideration the so-called budget airlines. Deputy Minister of Culture and Tourism George Nikolaidis met with representatives of small air transport companies that intend to enter the Greek market more seriously. Local authorities of outlying regions warm welcome the idea as they believe that this will help to increase the tourist flow to the country and will bring new investments in parallel. The representative of Ryanair, Ken O'Tool said his company would like to increase the volume of passenger flights to Greece, carrying over 1.5 million people annually.