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European Commission approves Olympic privatisation

European Commission approves Olympic privatisation Greek government plans to privatise its troubled carrier Olympic Airlines have been approved by the European Commission, according to reports.

Olympic Airlines was founded in 1957 by shipping magnate Aristotle Onassis but was bought by the government in 1974 following the death of the billionaire's son Alexander.

The airline fell into trouble in the 1980s due to poor management and subsequent government over-staffing initiatives designed to win votes.

Five unsuccessful privatisation attempts for the Greek carrier have been mounted since 2001 and the airline has received over €850 million (£670 million) in state aid.

Antonio Tajani, the EU transport commissioner, told the International Herald Tribune: "I strongly hope that with commission approval of the privatisation plan, we send the message that we want a definitive break with the past."

However, he stressed that Olympic should "return the amount they received in state aid to the state, because we consider that amount incompatible with European legislation".

The airline must now find a buyer before the close of 2008 with an independent trustee put into place by the EU to ensure that the sale meets with compliance requirements.

Reuters reports Greek government plans to privatise the airline as involving the construction of three shell companies, including one called Pantheon which will take all Olympic's landing slots.

The plan also involves the creation of a new technical maintenance company and an entity to oversee ground handling.

Kostas Hatzidakis, Greek transportation minister, added: "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."

Mr Hatzidakis also indicated that the plan would safeguard jobs as Olympic currently employs a total of 8,000 people across its entire operation.


Airline News posted on 19 September 2008

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