ECONOMY

December 23 deadline for Olympic

Ongoing negotiations with International Airline Solutions (IAS) on the sale of a majority stake in Olympic Airways are set to end on December 23, Transport and Communications Minister Christos Verelis said yesterday as he stressed that the privatization process will not be further extended. The minister told Flash radio station that the government will come up with a final decision regarding Olympic Airways following the end of talks with IAS on December 23. The Australian consortium, backed by Olympic pilots and a number of leading businessmen, became the sole bidder for the national airline following the closure of preferred bidder Axon Airlines last week. Verelis said that IAS will be required to come up with a 100-million-euro financial commitment, something that Axon Airlines could not do, leading to the termination of its discussions with privatization adviser Credit Suisse First Boston on November 15. IAS will need to deposit the sum into an escrow account before we can proceed with the next stage, which is the submission of a comprehensive and analytical agreement, he said. Questioned on the possibility of further delays in the sell-off process should negotiations with the Australian consortium fall through, the minister was emphatic that there cannot be any postponement as we have no leeway for this. He said Olympic has been hit with a 30-percent drop in passenger traffic following the impact of the attacks in the USA, compounding financial problems aggravated by heavy airport levies. Verelis said the State is holding talks with airport operator Athens International Airport (AIA) on further levy cuts which will come into effect January 1, 2002. AIA slashed landing and parking rates by 5 to 60 percent in October. Airlines and tour operators, however, countered that the size of the reductions was not sufficient. What we are discussing is a reduction of about 10 percent, the minister said, noting that further cuts could come following a rescheduling of 20 to 25 percent of the airport operator’s debt payments. Citing the possibility that Greece could left without a national carrier on the eve of the 2004 Olympic Games, the Association of Greek Tourist Enterprises (SETE) yesterday said the State should take steps to foster demand. One way of doing this is to cut charges at airports countrywide. Opposition party leader Costas Karamanlis noted that the debacle with Olympic Airways underscored the government’s inability to push through structural reforms.