ECONOMY

Olympic having a hard time securing the required aircraft

The uncertain future of Olympic Airlines is creating obstacles to the smooth execution of the national carrier’s flight schedules. The management of OA is having serious difficulties covering its fleet requirements as one aircraft leasing contract after the other other expires and the company has to contend with a growing lack of confidence within the market. Aircraft leasing company representatives no longer trust OA, sources suggest, as it remains unclear exactly how long the airline will be able to keep flying. Deals for leasing aircraft that make financial sense are now a thing of the past for Olympic, especially in view of the fact that the holiday season is about to start in just a few days. The majority of airlines secure their fleet requirements in the fall to ensure there are no problems with the execution of their summer schedules. This was not possible for Olympic, as it was last fall that the rumors of a likely closure of the company began to spread, creating uncertainty about the long-term activities of the airline. There is a clear risk that the summer season will find OA with just 36 aircraft instead of 42 that are required for the execution of the schedule it has already submitted to the International Air Transport Association (IATA). As a last resort, the company may even need to cut down on flights due to the lack of aircraft. In December 2007, two aircraft that had been leased from Spain’s Hola left OA, along with an Airbus A300-600. End-March will see the expiry of the contracts for an aircraft from HellasJet and another from Hola. At the height of the summer season, in June, the contract for the last Hola plane will expire, reducing the national carrier’s fleet to just 36 aircraft. The management of OA is not ruling out the option of short-term leasing (for a month), which would not only entail a high cost but also require state guarantees, even though Transport Minister Costis Hatzidakis has given the assurance that the company will fly as normal until the end of the year. In a statement, OA pilots have expressed their deep concern about the problems and are due to hold a meeting tomorrow with the management of the company. The main subject on the agenda will be the «contraction,» as they say, of the airline’s fleet. Despite these developments, Olympic Airlines passenger numbers posted a 5.7 percent yearly increase in 2007, reaching 5.93 million passengers. The picture remained positive in January 2008, with passengers increasing by 3.4 percent compared with the same month last year. But this cannot continue for long unless the necessary number of aircraft is leased in time.