The European Commission has blocked a proposed merger of Greek airlines Aegean Airlines and Olympic Air.
The commission announced its decision yesterday saying it believed the tie-up would lead to increased prices and reduced service quality.
The ruling prompted Olympic chairman Andreas Vgenopoulos, who heads its parent Marfin Investment Group, to warn of “negative consequences” for the struggling Greek economy.
Joaquín Almunia, commission vice president in charge of competition policy, said: “It is the duty of the commission to prevent the creation of monopolies when applying the EU merger control powers conferred on it by the Member States.
“My services and myself did our best to find a solution, but unfortunately the remedies offered by the companies would not have adequately protected the interests of the four million consumers that use the routes.”
The decision came despite assurances from the airlines that they would maintain standards and allow new entrants into the market
Theodore Vassilakis, chairman of Aegean, said: “An important opportunity for a consolidated representation in the European aviation market has been lost. We will adjust and continue. Our track record shows that we can succeed through challenging times.”
The EC decision that the merger would create a “quasi-monopoly” came after a 10-month investigation.