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Olympic Airlines

European Commission approves plan to privatize Greek airline  Sep 18, 2008

ATHENS: The European Commission on Wednesday approved a Greek government proposal to shut down and sell Olympic Airlines, also ordering the debt-ridden state carrier to pay back €850 million in illegal state aid.

The commission, the regulatory arm of the European Union, took action after reviewing the plan to restructure Olympic Airlines by transferring its assets to a new entity called Pantheon.

"I strongly hope that with today's commission approval of the privatization plan, we send the message that we want a definitive break with the past," the EU transport commissioner, Antonio Tajani, said.

He said that the EU was asking Olympic Airlines "to return the amount they received in state aid to the state, because we consider that amount incompatible with European legislation."

The unprofitable Olympic, founded in 1957 by the shipping magnate Aristotle Onassis, has tried and failed five times since 2001 to privatize.

The government bought Olympic in 1974 when Onassis moved to relinquish control after his son, Alexander, died in a plane crash.

During the 1980s, mismanagment drove the company into debt as vote-hungry governments hired thousands of new workers.

The airline has until the end of the year to find a buyer. An independent trustee was to oversee the sale to ensure that EU rules were not violated. But it remained unclear whether plans to sell assets of the airline, including its cargo handling and maintenance services, would cover the full amount Olympic is required to return to the Greek state, which is the equivalent of $1.2 billion.

Under the plan, the Greek government will set up three new shell companies: Pantheon, which will be given Olympic's landing slots, a new ground handling company and a new technical maintenance company, Reuters reported.

Union leaders and Olympic Airlines crew members threatened to protest the privatization, vowing to keep the national air carrier in Greek hands.

"The government calls this privatization plan a green light," said Markos Kondylakis, president of the Olympic Airways union of mechanics. "For us, though, it's a red light, and we're determined to bring this plan to a halt."

The Greek transportation minister, Sotiris Hadzigakis, said that jobs would be protected.

"This plan is a big structural intervention by the government, and it resolves in the best possible manner, an issue that has troubled Greek society and the political system for about 30 years," Hadzigakis said.

Olympic Airlines has about 4,500 employees. In total, Olympic companies have about 8,000 employees.

European Commission approves plan to privatize Greek airline

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