Ryanair’s growth in Greece threatens Aegean’s turnaround only months after Olympic acquisition

In Apr-2014, Ryanair will open bases number 63 and 64 at Athens and Thessaloniki, bringing its total in Greece to three (Chania was the first). With eight new routes, including a 36 times weekly Athens-Thessaloniki service, Ryanair's Apr-2014 seat capacity in the country looks like being around 50% higher than in Apr-2013.

For Greece's leading airline group Aegean (which now includes Olympic Air), perhaps the most significant and worrying elements of Ryanair's Greek expansion are that it is moving into the latter's Athens stronghold and that it is increasing its domestic Greek activities. Only months after the European Commission approved the Aegean acquisition of Olympic, partly on the grounds that no competitors were likely to enter routes where they operated a duopoly, Ryanair is going head to head on four of Aegean's top 10 domestic routes (including one former duopoly route).

Why is Ryanair targeting Greece for such strong growth and what might this mean for Aegean's future profitability just as a return to profit comes into view after three years of losses?