On a wing and a prayer

Sources say government now leans toward closing loss-making carrier

The conservative government is determined to ease the burden taxpayers have been stuck with in recent years from the loss-making Olympic Airlines (OA), senior government sources said yesterday, indicating that the state is likely to liquidate the air carrier after the EU releases its expected probe into the airline today.

“The New Democracy government is not prepared to allow further burden on Greek citizens without there being any hope for Olympic,” said a senior government source yesterday.

The country’s national air carrier is widely expected to be forced into closure soon after the European Commission releases the findings of a probe today into possible state aid provided by the previous Socialist government.

EU laws ban state subsidies to airlines and companies that received funds are required to repay them.

If ordered to repay some 500 million euros of aid, Olympic will be effectively forced to shut down after 48 years of operation.

Government spokesman Theodoros Roussopoulos repeated the state’s promise to protect OA workers in the event the airline closes down by transferring them to other public service positions.

“Care will be taken for all workers and the ministries involved are putting together a plan for this issue,” Roussopoulos said.

The government has faced a barrage of criticism over its handling of the case, with the PASOK opposition party saying that it has not done enough to keep the airline flying.

New Democracy sources say the airline costs taxpayers too much, about 1.5 million euros per day, and that its closure would form the next step of the government’s reforms program, which they argue is supported by the broader public.

Questioned on whether the government will appeal the EU’s decision, Roussopoulos replied that all options will be taken into consideration.

Olympic Airlines informed passengers yesterday that the airline’s flights will continue as normal. Sources in the air transport industry say that talk of OA shutting down has resulted in the cancellation of bookings from international tour operators.