The Competition Commission published the Interim Report on the Sectoral Inquiry into Coastal Shipping, which began in April 2025. The Interim Report presents the structure of the coastal shipping market, the determinants of supply and demand, the competition parameters, the institutional framework and the rules under which the business choices and the behavior of the market players are formed.
Through this investigation, inefficiencies and potential distortions in the market’s operation are highlighted, which require further investigation. At the same time, by recording concerns and formulating preliminary positions and proposals, the Interim Report aspires to provoke an honest and open dialogue with the competent authorities and stakeholders, aiming to strengthen competition and find the necessary balance between the economic viability of the market players and serving the wider public interest.
The main positions of the Interim Report are summarized below:
– Regarding the conditions of supply and demand
Coastal shipping is a strategically important sector for the Greek economy and /territorial cohesion, as it ensures geographical continuity between the mainland and the islands and decisively supports the tourism product. In terms of demand, it arises mainly as a derived need for island-mainland connections and inter-island connections, covering passenger, vehicle, cargo and tourist transport. Demand is highly seasonal, peaking during the summer months due to tourism. At the same time, there is a relatively inelastic core of demand from permanent islanders and cargo flows, while tourist demand is more elastic and sensitive to price and service quality. After the drop of the COVID-19 pandemic, a recovery is observed: in 2023, approximately 17.25 million passengers and 3.3 million vehicles were recorded on domestic routes.
On the supply side, approximately 299 vessels (247 conventional and 52 high-speed) and 216 companies are active. Despite the large number of players, the market shows concentration: Attica Group and Seajets jointly hold approximately 60% of passenger capacity. The fleet is relatively aged (average age ~25 years, and ~31 years on medium-long distances), while the integration of green technologies remains limited. In the cost structure, fuel constitutes the most significant expense, followed by payroll, maintenance and insurance. The largest companies benefit from economies of scale. The sector shows signs of recovery and trends of further concentration, with prospects under the precondition of investments in technology and sustainability.
The system of organizing coastal shipping balances two often conflicting logics: on the one hand, the character of a public utility service (minimum adequacy for reasons of public interest), and on the other hand, the need for economic viability as a productive market activity. This balance is made difficult by the multitude of /remote islands and the intense seasonality. The liberalization of the market since 2002 and harmonization with EU law have limited state intervention, formally strengthened competition and service improvement, but have left open issues of /sustainable service, especially for small or less touristic islands.
The ability to freely select routes pushed companies towards commercially more attractive connections, resulting in uneven service quality per destination.
In the formation of prices, the needs of the “average user” (islanders, regular passengers, carriers) and the income environment do not seem to be adequately considered, but the perspective of the occasional visitor prevails. As a counterbalance, the “Transport Equivalent” is applied, which subsidizes permanent residents and island businesses so that the cost of sea transport approaches the cost of land transport.
– Regarding the institutional framework
The institutional routing framework, although bounded, leaves room for mitigating the intensity of competition, e.g., through route alignment procedures following an invitation from YNANP for “necessary time intervals”. This practice can create a field of communication between competitors and a risk of anti-competitive collaborations, as demonstrated by decisions of the HC (/2021, /2022) on ferry routes (coordination of /discounts, allocation of routes). Furthermore, the institutional representation of sectoral unions in advisory bodies (such as the SAS) raises concerns about governance, transparency, equal treatment, and potential conflicts of interest. Overall, concerns arise regarding rational network planning, the effective provision of quality services, and final prices.
As a direction, modernization towards a “dynamic-responsive-adaptive” regulatory framework is proposed, which treats regulation as a repeated game with changing incentives, charts a middle course between rigid rules and freedom, and incorporates learning from the past. The goal is to create conditions for healthy competition and continuous market evolution instead of static and short-term incentives that in the long run distort the economic balance.
– Regarding port infrastructure
Port infrastructure constitutes a critical complementary link in the network value chain. Chronic deficiencies, especially in island ports, affect supply and demand satisfaction, undermining efficiency. The upgrade (foundations, piers, depths, building facilities), the enhancement of security, and the improvement of services provided to passengers are priorities. At the same time, addressing the fragmentation of entities, upgrading Port /Port Funds, and creating strong administrative bodies with sufficient size and technical expertise (e.g., the model of the Evia Port Authority) are proposed. A system of “time slots” in ports (Sea Ports Time Slots) by analogy to aviation is also discussed, so that peak hours are /reserved and congestion and simultaneous arrivals-departures are avoided, under careful planning to function in favor of port-service complementarity. Vertical integration can rearrange strategies, interactions, and power balances, especially when alternative neighboring ports are developed.
– Regarding the coastal fleet and the green transition
The current coastal network has a “star-shaped” topology with Piraeus as the center. Before 2002, this led to multiple approaches of many islands on the same route, with a burden on quality, especially in summer, and with a paradoxical dependence of neighboring islands on Piraeus for communication. Today, the central structure remains, as a result of company choices within an indicative general network.
The redesign towards a radial model (hub-and-spoke) with central hubs and peripheral island lines has been studied and appears to improve efficiency, provided it is integrated into a unified multimodal island transport system. A critical accelerator for topology change is the upgrade of port infrastructure that will allow the creation of regional hubs.
The fleet is aging, with consequences for operational costs (repairs, fuel) that are passed on to prices. The green transition necessitates either fleet renewal with /newbuild vessels or extensive upgrades (anti-pollution technologies, energy efficiency). The required investments may create a financing gap at the company or sector level. Nevertheless, they open a new field of competition that will reconfigure capacities, qualities, locations, and prices. A decisive variable is access to financing and the possibility of new players entering the market.
– Regarding the supervisory governance of the sector
Supervisory governance has undergone repeated restructurings (/transformations of bodies such as RAFE, DAL, RAL), a fact that does not help stability, the avoidance of overlaps, and the coherence of the regulatory framework. The codification of Law /2022 attempts partial order, but the fragmentation of competencies hinders implementation. The /operation of the SAS also raise issues of transparency and conflict of interest. The existence of a single regulatory-supervisory body is recommended to ensure a well-functioning market, adherence to the framework, and strategic planning.
– Regarding public service obligation contracts
Public service obligation (PSO) contracts are necessary for /low demand and territorial cohesion, but their cost has increased dramatically (~+1400% from 10 million Euro in 2001 to 150 million Euro in 2025) and the lines reach 75 (with a forecast up to 2029), indicating on the one hand market weaknesses to fully serve the needs, and on the other hand ineffective utilization of the intermediate stage of exclusive contracts without charter fee. The current framework allows for /out-of-schedule routes even on subsidized lines, effectively nullifying exclusivity and increasing the fiscal cost. A review of the PSO framework is needed: incentives-disincentives of the legislation, precise identification of “truly unprofitable” lines, and improvement of competitive procedures.
– Regarding island cohesion
Finally, for the economic-social-territorial cohesion of the islands, a holistic multimodal island transport system is required, which will organically interconnect shipping and air transport (airplanes and, where feasible, /helicopters). A single central entity for planning and implementation will ensure synergies, smooth transfers, and the integration of a single multimodal system, capable of reliably and economically covering the needs of all island regions.
Overall, the modernization of the institutional framework, the upgrade of ports, the redesign of the network, investments in a green fleet, and stable and transparent governance constitute the necessary preconditions for an effective, competitive, and socially fair shipping service.
