Olympic Air and Aegean merger is blocked by EU
The European Commission has blocked the proposed merger between Greece's Olympic Air and Aegean Airlines on the basis that it would create a "quasi-monopoly".
It said the merger would have led "to higher fares for four of the six million Greek and European passengers flying to and from Athens each year".
The merger was first announced in February last year.
The Commission blocked the merger of Ryanair and Aer Lingus in 2007.
It said Olympic and Aegean controlled more than 90% of the domestic Greek market.
There was "no realistic prospect" of any new airline being able to enter the market to "restrain" the merged airline's pricing, it found.
The two airlines offered to give up take-off and landing slots at Greek airports, but this was not enough to allay the Commission's concerns.
"The merger between Aegean and Olympic would have led to a quasi-monopoly in Greece and thus to higher prices and lower quality of service for Greeks and tourists travelling between Athens and the islands," said the Commission's vice-president of competition policy, Joaquin Almunia.
Olympic Air came into being on 1 October 2009 following the privatisation of Olympic Airways.