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EasyStelios: More dangerous than the government monopoly is the private monopoly

26 February 2010 / 10:02:34  GRReporter
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“The only thing more threatening the development of the competition than the governmental monopoly is the private monopoly.” In this way the president and founder of the corporate group Easy Stelios Haji-Ioannou commented on the merger of the air transportation giants Aegean and Olympic Air before the electronic issue of the newspaper Ethnos. The founder of the low cost airline company Easy Jet believes that the merger of the two companies will inevitably lead to an increase in the prices of the airline tickets. The entrepreneur has the opinion that if the government and the European commission approve the merger, then they have to revise the tenders for the interior destinations. In other case the competitiveness of the market will be lost.

Many economic observers expressed their concerns about the preservation of the competition in the market. The new company has to receive an approval of the merger under the law for protection of the competition in Greece and the European Union. According to the current laws Brussels has to approve the merger of two or more companies which have a turnover of over 250 million euro. If the company covers over 40% of the flights for a destination it is considered to be a dominating company. In case of 70% coverage of one destination this is considered to be a monopoly. After the merger the new corporation will have to give up some of the destinations it serves in order to restore the balance on the market. In other words if after the merger of Aegean and Olympic Air the flights for the destination Athens – Thessaloniki (for example) are carried out primarily by the new corporation it will have to give up a part of the slots to a third company. This is a measure necessary for the preservation of the competitive conditions on the market.

After the privatization which ended in the middle of last year, Olympic Air does not have the right to make reorganization of the main capital until October 2010. In this period the new company has to find a door in the legal framework of the country as well as of the European community in order to avoid an eventual rejection of the merger. From the press center of the Ministry of economics, competition and merchant marine stated that the protection of the society from monopolistic organizations and the preservation of the working places will have priority.

Tags: EconomyMarketsCompanies
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