ECONOMY

144-million-euro loss posted by Olympic in 2001

Olympic Airways admitted yesterday that it had a gaping half-billion-euro accumulated net loss at the end of 2001 but the ailing Greek state carrier’s chief executive said it had managed to break even at the operating level in 2002. «2001 was the toughest year ever for the airline industry,» Dionysis Kalofonos told Reuters. «If you see the 2002 accounts, which are out soon, we are virtually at break-even,» Kalofonos said. The delayed financial declaration for 2001 – presented in drachmas despite Greece having adopted the euro since 2001 – showed a dire financial position, although its auditors warned the results were still incomplete. «At the end of the day, the government will have to account for this and the Greek taxpayer will have to foot the bill,» said an analyst who declined to be named. Olympic had a net shortfall of 357 million euros at the end of 2000 and its 2001 accounts paint the bleakest picture since the State took it over in 1975 from late shipping tycoon Aristotle Onassis. The figures, which showed operating losses had widened to 144 million euros in 2001 from 95 million in 2000, also help to explain why the government has had little success in finding a buyer for the airline despite repeated attempts since 2001. Moreover, Olympic’s independent auditors said in notes to the 2001 results that the airline’s financial records were incomplete, making it impossible to verify the exact extent of losses or liabilities. They also said the company lacked a fully computerized management information system to track revenues and receivables and there were shortcomings in its internal auditing. Olympic’s revenues fell to 809 million euros in 2001 from 830 million in 2000, while the cost of goods sold increased to 952 million euros. The figures showed Olympic’s net worth turned negative in 2001, reaching 144 million euros at the end of the year after a positive 1.9 million for 2000. The airline blamed a combination of adverse factors for the poor results. «The terrorist attack in September 2001 had a major impact, as well as the costs of moving to the new (Athens) airport at Spata,» Kalofonos said, adding the airline still managed to improve average fare yields and cut costs. He said 2002 results will benefit from staff cuts and changes to Olympic’s fleet and organization.