ECONOMY

Olympic Airlines enjoys increased traffic, but its status is still in the air

Flag-carrier Olympic Airlines, the successor of debt-laden Olympic Airways, yesterday reported increased revenues and passenger traffic in the first seven months of the year despite a smaller fleet. The airline, which the government is trying to privatize, said sales were up 14.6 percent to 298.6 million euros ($374 million) year-on-year with passenger traffic up 3.6 percent. But it did not say whether it had broken even or managed to earn a profit. Last year Olympic posted a net loss of 87 million euros, remaining in the red for the second straight year after its relaunch. Adding 23 million euros it lost in 2003, accumulated losses are dangerously close to its equity of 130 million. Olympic said it operated a fleet of 40 aircraft this year, down from 44 in 2004, improving its average load factor to 69 percent «for the first time.» It said it flew a total of 3.34 million passengers during the period. Greece has signed a preliminary agreement to sell Olympic Airlines to private New York-based investment group Olympic Investors – York Capital. But the deal requires European Commission clearance, as Olympic has been under scrutiny for several years because of past funding, estimated at more than 300 million euros, that Brussels has found to be government subsidies to keep it flying. The EU Commission will close its latest investigation into possible illegal state aid, launched in March 2004, on September 14. Responding to questions, government spokesman Theodoros Roussopoulos said the government will weigh any unfavorable decision by the Commission in relation to other options. «It will not automatically mean the shutdown of Olympic. The privatization process is delicate and I wish to say no more at this point,» he said. (Reuters, Kathimerini)