Verelis stands firm on OA

Greece yesterday criticized the European Commission’s view that there should only be four to five carriers serving European countries, saying that the model distorts competition and hurts consumers. «We disagree with the Commission’s view regarding the number of airline companies that can survive in the long term in the market,» Transport Minister Christos Verelis told Skai radio station. Verelis’s criticism underlines the Greek government’s belief that the recent decision by Brussels ordering national flag carrier Olympic Airways to repay a hefty 194 million euros to the Greek State is part of the Commission’s strategy to pare down the number of European airlines to four or five. Including low-cost carriers, there are more airlines operating in Europe than the number of countries. Brussels’s views notwithstanding, countries, large or small, have sought to maintain their own national carriers regardless of the cost or business logic. Two European carriers that went under last year, Sabena and Swissair, were subsequently resurrected with private sector funds and under different names. Closing carriers «by force» for the sake of a theoretical model «constitutes intervention in the market, distorts competition and creates problems,» Verelis said. He said Olympic Airways was already laying the foundation for its viability by improving its finances in the past year and a half. It posted a pretax loss of 95 million euros in 2000, has yet to release 2001 figures and expects an operating profit this year. Greece plans to appeal to the courts against the Commission’s ruling, Verelis said. He also contradicted Brussels’s calculations on the size of the subsidies to be repaid, saying that only 41 million euros in capital injection were involved while the remaining 153 million euros were already settled according to Greek law.

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