UPDATE 1-Aegean, Olympic deal set for lengthy EU review -sources

Thu Apr 11, 2013 11:20am EDT

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By Foo Yun Chee

BRUSSELS, April 11 (Reuters) - Aegean Airlines is set to face a lengthy investigation by EU antitrust regulators into its second bid for Olympic Air which could force the Greek carrier to offer more concessions, sources said.

Aegean submitted a set of concessions to the European Commission last month in an attempt to win approval for the deal, but did not provide details.

Merging airlines typically offer to divest slots - or rights to operate specific flights - and give rivals access to frequent flyer programmes to allay authorities' concerns that competition will be reduced by tie-ups.

"The Commission is expected to open an in-depth investigation into the case," one of the people familiar with the matter said on Thursday.

Such investigations last 90 working days, which would mean the EU competition authority extending its deadline to decide on the deal from April 23 to the second half of the year.

Aegean sees the 72-million-euro ($94.21 million) deal as crucial for its survival in the shrinking Greek air transport market as the bailed-out country faces a protracted recession.

EU regulators rejected its 170-million-euro offer for debt-ridden Olympic, owned by Marfin Investment Group (MIG) in 2011, citing the proposed merged entity's quasi-monopoly of the Greek air market and the lack of interest from any prospective rival.

($1 = 0.7642 euros) (Editing by Helen Massy-Beresford)

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