ECONOMY

Plan for new Olympic Air is finalized

The government will submit a law in the coming days setting up the New Olympic Airways by splitting the old one, keeping only the flight division and adding current subsidiaries Olympic Aviation and Macedonian Airlines. Sources within the Transport and Communications Ministry said that the draft was ready and would be submitted either as part of a law that has already been submitted in Parliament or as part of a new law. The law would set up the New Olympic Airways, which will only handle domestic and international flights and will employ about 1,850 out of the over 7,000 currently employed. After repeated failures to find interested buyers, New Olympic Airways will be a state-owned company, while the current Olympic Airways will no longer be considered an air carrier. This will open the way for the groundhandling operation, one of the few profitable segments, to be separated from the old company and become an independent firm that will sign a contract with New Olympic Airways. The government hopes to pass the legislation, and the required ministerial decisions, as soon as possible so that New Olympic can begin operations by late fall. The new company will require a flight license from the Civil Aviation Authority, while the old IATA code and ticket code must also be transferred to the new company. It is not known how long these bureaucratic procedures will take. A big unknown is the European Commission’s reaction to the old Olympic ceasing to operate as an air carrier. The old company is saddled with a 194-million-euro fine for illegal state subsidies, which it must return. The government disputes the figure, claiming only 41 million was given in extra subsidies. It is certain that the Commission will closely monitor any early retirement program and aircraft leasing agreement for signs of state subsidy. According to information yesterday, Olympic cabin crews were close to an agreement, despite misgivings. However, the pilots were objecting, as only 170 of the current 450 will find jobs with the new company. It appears that the government would not be adverse to a break with the pilots; it has already threatened to fill pilot jobs in the new company through an open call for applications.