ECONOMY

Law to create New Olympic Airways expected today

The law creating the New Olympic Airways from the ashes of the old, debt-ridden state airline is expected to be submitted to Parliament today, after several delays. The Ministry of Transport has made no official announcement about the status of the company. However, as Kathimerini has repeatedly written, the new company will consolidate the flight operations of Olympic Airways and its subsidiaries, Olympic Aviation and Macedonian Airlines. The new company will employ some 1,850 people, while the old Olympic Airways will lose its air carrier status. It is expected that with the vote on the law, or, rather, the amendment establishing New Olympic Airways, several decrees will follow, allowing New Olympic to begin operations toward the end of autumn. First, it must obtain permission to fly from the Civil Aviation Authority and the old Olympic’s flight codes and ticket serial numbers must be transferred to the new carrier. Transport Minister Christos Verelis got the go-ahead from Prime Minister Costas Simitis a few days ago. In their meeting, however, he expressed misgivings over the possibility of finding private investors willing to buy a 51 percent stake in the new company. In any case, New Olympic Airways will begin as a state-owned firm. The government has already concluded agreements with the pilots about their salaries. Since the new company will need fewer pilots, generous severance bonuses will be paid to those who leave voluntarily. This will not only be an additional burden but will also lead to a depletion of the financial resources of the airline personnel’s auxiliary pension fund. All government measures will be closely scrutinized by the European Commission to make certain that no illegal state subsidies are provided. The Commission has made it clear that any early retirement program should not provide the opportunity for a cash infusion by the State to the new company. The European Union may also react at the prospect of the old Olympic Airways losing its air carrier status. According to the EU, the old company must return 194 million in illegal state subsidies. The Transport Ministry has disputed this amount, claiming illegal subsidies did not exceed 41 million euros.