ECONOMY

Bidders still want airline

Despite the heavy fine – 700 million euros by the latest count – imposed on Olympic Airlines by the European Commission for receiving illegal state subsidies, the two main bidders, both investment funds, are, surprisingly, still interested. The top bidder – Olympic Investors-York Capital, which on August 2 signed a memorandum with the Greek government on the acquisition of Olympic Airlines – has not withdrawn its offer. The second-highest bidder, Klesch & Company Limited, went a step further: In a letter to Economy and Finance Minister Giorgos Alogoskoufis and Transport and Communications Minister Michalis Liapis, it offered its «help» to the government by offering to buy the airline, as well as the technical support and ground handling operations which have remained with the old Olympic Airways. The letter, written on Monday, a day after Prime Minister Costas Karamanlis suggested that Olympic Airlines faced closure, said the following: «In the context of the outcome of the results from the EU investigation and the difficult decisions the Greek government is facing, we would like to reiterate our interest in acquiring the business of Olympic Airlines SA («the Company»), and potentially its maintenance and ground handling operation. «We wish to be of as much help as possible to the government in finding a solution for the Company in these difficult moments, whether it is through the continuation of the privatization or a purchase of assets of the company through a Greek or EU insolvency procedure. «We remain enthusiastic about the opportunities that exist to make Olympic a successful business enterprise and are prepared to dedicate all our efforts to this task through a superior business plan and investment program. We believe that we can make Olympic a strong successful airline, limit any disruption to transportation service and protect employment. Ultimately this can only reflect positively on the Greek government. «Should you wish to reconsider our candidacy for the purchase of Olympic Airlines, we are available to meet with you when appropriate.» The letter is signed by A. Gary Klesch, chairman of Klesch & Company Ltd. Asked by Kathimerini about his company’s continued interest, Klesch replied: «We have a strong belief in Olympic’s brand name; its client base is very strong, the geographical location ideal (for tourism development). Our plan includes the complete renewal of the fleet. To this end, we have already talked with [aircraft producers] Airbus, ATR and Bombardier in order to announce an order in case we conclude talks successfully and acquire Olympic.» Klesch confirmed that his company is interested in acquiring company assets if the government decides to liquidate Olympic Airlines. He repeated his company’s interest in flights, maintenance and ground handling. The government’s plan for a liquidation-in-operation of Olympic Airlines may prove to be too fraught with hurdles. A company document reveals that the Civil Aviation Authority can revoke the license of a company in liquidation, making continued operation impossible. Second, the aircraft lessors may revoke the leasing agreement. Third, company creditors may demand immediate payments. Finally, putting the company into liquidation may provoke a massive market reaction, with passengers and travel agents cancelling reservations. At present, reservations are up on last year. Olympic Airlines’ Managing Director Leonardos-Odysseas Vlamis says the government must declare that the airline will continue to operate and pass legislation temporarily impeding creditors from making claims in court.