Subsidized air routes tender starts

Next week will likely see the start of the tender for the subsidized air routes by the Civil Aviation Authority (CAA), to determine the operators of 24 routes that mostly serve island airports. There is particular interest in this year’s tender, which covers the 12-month period from October 2009, as for the first time it will probably involve more than one entrant. The CAA intends to have the tender process completed by September as in October the new Olympic Air will take over the entire flight schedule of the old Olympic Airlines. The restriction that prevents firms operating for less than one year from participating in the tender will be lifted so as not to exclude Olympic. Yet this also opens the door to the newly established company, Athens Airways, whose representatives have expressed clear interest in the subsidized routes. However, it is Aegean Airlines that will be the strongest competitor for Olympic. Subsidized routes have traditionally been the most profitable part of Olympic’s schedule. While popular routes such as Athens-Thessaloniki are loss-making, the state-subsidized services generate some 35 million euros annually for Olympic. A few weeks later another tender is expected to be called for the provision of ground handling services at the 33 regional airports, effectively signaling the liberalization of this market, too. Airports across the country will be grouped into seven or eight categories, each headed by a profitable terminal or two medium-sized airports along with two or three loss-making terminals which alone would have attracted little interest. The aim is for this tender to be proclaimed within the current month, although there are doubts that this will be the case. Olympic Air and Aegean are likely to also take part in the ground handling tenders. Transport Ministry sources suggested that a balance should be struck among the main market players, i.e. Olympic Air, operating under the management of Marfin Investment Group, Aegean Airlines which cooperates with Goldair, as well as Swissport.