More complications in Olympic Airways’ sell-off

Privatization adviser Credit Suisse First Boston (CSFB) was expected to deliver its recommendations on the sale of national flag carrier Olympic Airways either yesterday or today, National Economy Minister Yiannos Papantoniou said yesterday. CSFB had said last Friday that it would issue its recommendation early this week, following the expiration of the initial negotiation period with frontrunner Axon Airlines and the receipt of clarifications from Cyprus Airways and Australian venture capital group Integrated Airline Solutions. The Transport Ministry, however, had yet to announce whether it had received the report from CSFB late last night as Kathimerini English Edition went to press. The state’s procrastination in resolving the selloff of Olympic Airways, however, could derail the entire process, as second-placed bidder Cyprus Airways said yesterday it would not renew its three-million euro bank guarantee to October 31. Cyprus Airways has already sent a letter to the privatization advisers informing them of the decision, spokesman Tassos Angelis told Kathimerini English Edition. We have told CSFB of our concern over the timing of the transaction, and that the passage of time has rendered our business plan much more difficult to be implemented, he said. One major issue that needs to be speedily resolved is Olympic Airways’ fleet of 11 Boeing 737s and its impact on the company’s revenues and employees, he said. Despite this less than favorable development, Angelis said the Cypriot company continues to be interested in Olympic Airways and willing to hold talks with the Greek government. Cyprus Airways’ bid is backed by Italy’s flag carrier Alitalia, Fraport AG, owner and operator of the Frankfurt airport, and Greek-American magnate John Catsimatidis. All three bidders were asked in August to renew their letters of guarantee for another two months, an indication of the government’s plans to keep the door open for all eventualities.

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