ECONOMY

Alternative OA plan calls for minority state participation

The refusal by Transport Minister Michalis Liapis to inform Parliament of the government’s plans for Olympic Airlines, in case the present sell-off plan falls through, was correct in the present circumstances. Most ministers and, probably, Liapis himself, have their doubts about the viability of the Olympic Investors-York Capital consortium bidding for the airline; they fear that, having made as much profit as it can in one or two years, it will then abandon OA. However, the memorandum with the consortium, which Kathimerini revealed on Wednesday, is a binding document. Never has a government got so far in years of trying to privatize Olympic. Therefore, the government is obliged to follow the process through until the end, successful or otherwise. It must also ascertain that other candidates do not offer viable proposals. According to our sources, the government has not merely thought about alternatives but has already planned for them and, in case the current sell-off attempt falls through, is ready to announce them early in the year, in order to have a new, healthy Olympic operating by the next summer season, with both domestic and European destinations. Within 15 days, when the current round of talks is expected to end, most likely with no result achieved, Liapis will begin a long round of talks with the European Commission in order to elicit its agreement for the government’s plans. Do as the Swiss did According to our sources the government plan will follow two successful cases of airline liquidations in Europe, in Belgium and Switzerland, where debts sank two well-known airlines (Sabena and Swissair, respectively). When the Belgian government decided to shut down Sabena, because it could no longer afford to subsidize it, it chose a small Sabena subsidiary, S.N. Brussels, to transfer all the parent company’s assets to. Then, the subsidiary hired only those workers it needed for a limited flight network and immediately sought a buyer who took over the management. Something similar happened in the case of Swissair (renamed Swiss), which was eventually taken over by Lufthansa. However, this small and healthy subsidiary no longer exists in Greece. Olympic Aviation, a profit-making Olympic Airways subsidiary, was shut down by former transport minister Christos Verelis, in order to build up the new Olympic Airlines. So, at this point, we will need to found such a company, with state capital which, according to the Belgian precedent, could be called OA Athens, which will buy whatever OA assets are worth retaining – especially its landing slots in various airports. Then it can look for a private-sector strategic investor to buy a majority stake. Continuation necessary So, the OA we knew will soon be history. That is a given. The other certainty is that a successor company will be set up, with the state as a minority shareholder. As polls have shown, even those Greeks fed up with OA’s delays and poor service want a national airline. Of course, OA’s only current domestic competitor, Aegean Airlines, cannot be part of the new company. The government has no intention of replacing a state monopoly with a private one. Prime Minister Costas Karamanlis has made it clear what his priorities are: Ensure employee rights, continue (subsidized) flights to numerous islands, promote competition and, above all, find a sustainable solution. Ensuring competition means inviting one of the large European carriers to be the new OA’s manger or, at least, businesspeople with sufficiently large funds to ensure investment, not asset-stripping. In the case of Swiss, the country’s largest retail banks assisted the state in setting up the new company. All these plans rest upon a single factor: the European Commission and whether it will agree with them.