Relaunch for Olympic Airlines
The Transport Ministry said yesterday Olympic Airlines will be closed down and relaunched as a private company, ending years of wrangling with Brussels over the loss-making state airline. The European Commission gave its blessing to the plan to liquidate Olympic and transfer some of its assets to a new, private company that will keep its name and the famous Olympic rings logo. The Commission also ruled yesterday that Olympic must return 850 million euros in illegal state aid it received between 2005-2007. «The company will be privatized,» said Transport Minister Costis Hatzidakis. «(The new) company will keep the name and the Olympic symbols, and this creates the conditions for the dynamic growth of Olympic in the future.» EU Transport Commissioner Antonio Tajani had said earlier that the Greek government’s plan to sell the assets of the airline, including its ground-handling and maintenance services, does not violate EU rules, but he told the airline it has pay back state subsidies. «We are asking… Olympic Airlines to return the amount they received in state aid to the state, because we consider that amount incompatible with European legislation,» Tajani said. He added that the European Commission would keep a close eye on how the airline is sold, making sure that the tender occurs in a free and open bidding process. An independent trustee will oversee the sale to ensure EU rules are not violated. Under the plan, a new company will acquire at market prices 65 percent of Olympic’s capacity. The old airline’s most valuable assets are its landing slots. Two further companies will be created to deal with ground-handling and maintenance, while the remaining parts of the company will be liquidated. Hatzidakis said that the some 8,000 Olympic employees who are expected to lose their jobs would be taken care of. Last December, the Commission launched a fresh investigation into further Greek state aid to the ailing national carrier over funding received since the end of 2004. «The Olympic Airways and Olympic Airlines cases have been a source of contention between the Commission and Greece since 1994,» said Tajani. Meanwhile, hundreds of union members shouting anti-government slogans blocked the entrance to the Transport Ministry soon after the announcement yesterday, squaring off with riot police. State carrier’s turbulent past Greece will close down Olympic Airlines and relaunch it under new guidelines. Here are some facts about the airline: Olympic Airways was founded by shipping tycoon Aristotle Onassis in 1957 after he took over Greek national airline TAE. Onassis sold Olympic back to the government for about $68 million in 1974 after his son Alexander died in a plane crash. Mismanagement led the carrier into financial hardship in the 1980s. Unions often went on strike over trivial issues. Staff numbers were swollen by vote-hungry governments and the airline became severely indebted. In 1994, the EU Commission requested the airline’s restructuring and an end to government subsidies. By 1996 the Commission realized that plan was not being fully implemented and prohibited further injections of capital from the state. Brussels approved another restructuring plan in 1998. A year later, the government hired British Airways subsidiary Speedwing to turn around Olympic but the plan failed. A 2000 tender to sell Olympic proved fruitless. A further restructuring in 2003 established Olympic Airlines, a slimmed-down version of Olympic Airways, and the government launched a new sale effort. (Reuters)
