The European Commission has opened an in-depth antitrust investigation of the proposed takeover of Greece's Olympic Air by its domestic rival Aegean Airlines.
The Commission, which acts as the 27-country bloc's competition watchdog, said Tuesday it fears "the transaction may lead to price increases and poorer service on several domestic Greek routes out of Athens," where the merged entity would have a monopoly.
The Commission now has three months to decide on the 72 million euro ($94 million) takeover bid.
A first attempted merger was blocked by the Commission about two years ago on grounds that the combined carrier could have monopolized the national market.
The Commission in February also blocked a similar repeated takeover bid by Ryanair for its Irish rival Aer Lingus.