The government has cleared a major hurdle in its effort to establish a New Olympic Airways freed of the burdens of the troubled national carrier — but at a significant price. Transport Minister Christos Verelis announced yesterday that four months of negotiations with pilots had ended successfully. Now the only union with which agreement has not been reached is that of flight attendants, but negotiations are said to be going well and could be completed in the next few days, allowing the necessary legislation to be passed. This is expected to split the old company, keeping only the flight division and adding current subsidiaries Olympic Aviation and Macedonian Airlines. The government wants the new airline to fly in September.

As the new airline will employ only 420 of Olympic’s 640 pilots, the government will entice pilots to choose early retirement, with severance payments reaching as high as 620,000 euros.

“New Olympic Airways will be created as we have planned,” Verelis said. “With Olympic’s pilots on board, which was achieved after long months of negotiations, New Olympic Airways’ uninterrupted operation is achieved and jobs are safeguarded.”

Among the basics of the deal with pilots is that about 140 of them who were to retire by the end of 2005 will go into early retirement. Wages of pilots of the new airline will be in line with those in the market. These will be tied to an increase in their productivity and the company’s profits. Work regulations (such as flight time) and other benefits will also be in line with other airlines’.