Greek carriers fight an ominous jumble of recession, euro-woes and market fragmentation

Greece's airlines are operating in an unsympathetic environment shaped by four consecutive years of economic recession and austerity measures, worries about a possible exit from the eurozone and a fragmented market with the largest carrier holding a mere 33% capacity share. The situation is untenable and revives the discussion if the European Commission (EC) in Jan-2011 took the right decision in blocking the proposed merger between Aegean Airlines and Olympic Air.

Both of Greece's major carriers are loss making and Olympic, which had high hopes to become Greece's new national carrier after it bought some of the assets of the state-owned and de facto-bankrupt flag carrier Olympic Airlines, was forced to refocus its strategy towards regional operations to survive. Olympic's passenger numbers fell 23% in 2011 to 3.4 million from 4.4 million in 2010.