ECONOMY

Fearing OA’s demise

With the shutdown of ailing Olympic Airlines a distinct possibility under the weight of massive debts, tourism professionals fear that the loss of Greece’s national carrier will make the domestic flight sector a one-company industry. «The end of Olympic would be a catastrophe for us,» said Yiannis Evangelou, chairman of the Hellenic Association of Travel and Tourist Agencies (HATTA). «It would create a monopoly situation on internal destinations, particularly on important tourism destinations, such as the islands,» he told AFP. Evangelou and other tourism professionals expect that the potential demise of Greece’s historic carrier will benefit Aegean Airlines, Olympic’s sole effective rival on domestic routes. «We can expect that Aegean Airlines will develop its services to fill the gap, but there will no longer be competition on prices,» said Elena Colloniari, branch director of global travel agents TUI on the popular island resort of Santorini. Aegean recently announced an order for eight Airbus A320 aircraft. The European Commission on Wednesday demanded the recovery of several hundred million euros of state aid illegally granted to Olympic over several years in the midst of a last-ditch Greek government effort to sell the struggling airline to Greek-US consortium York Capital – Olympic Investors. The case dates to the 1994-2000 period when the European Commission authorized payments of state aid to restructure Olympic Airways, which became part of Olympic Airlines in 2003, thereby complicating efforts to recover the money. Evangelou added that neighboring countries, such as Turkey and Croatia, could take advantage of Greece’s European Union obligations, given that they are under no pressure to cease subsidizing their own tourism industries. «There will be a difficult adaptation period,» said George Tsakiris, the chairman of the regional hoteliers’ association (EXA). «We want a successor to be found quickly… so that flight services to the country do not suffer.» Accounting for 38 percent of passenger traffic and 22 percent of revenues at Athens International Airport, Olympic has been in turmoil since September 11, when Greek Prime Minister Costas Karamanlis declared that the company «can no longer operate in its current form.» «We have been studying alternative solutions for the day after for quite some time, but there are few options, that much is certain,» Karamanlis told reporters. Though the government says it will respond quickly to address the issue, it must also tread carefully to avoid alienating Olympic’s influential unions, whose strikes frequently cause country-wide travel chaos. Government spokesman Theodoros Roussopoulos on Monday said the government will safeguard the interests of workers who lose their jobs in the privatization process. Options under consideration are voluntary retirement packages or employment in other state sectors, he said. «Nobody will be left out on the street,» the PM said on September 11. Roussopoulos also stressed that «whatever the outcome» of negotiations over Olympic, the Greek state will ensure that vital flights to isolated islands – which the state carrier currently handles – will continue through deals with other operators.