Olympic may not survive the winter

Greece’s cash-strapped Olympic Airways faces collapse by this winter if a buyer does not pour money into the airline soon, but no white knight has been seen rushing to the rescue, government sources said yesterday. Efforts to sell the ailing airline have faltered in the face of low buyer interest after September 11, and a European Union inquiry into possible competition rules violations could make Olympic the third major European airline to go bust in about a year. «Transport Minister Christos Verelis has made it clear that if it is not sold by the end of summer, Olympic will not survive through the winter,» a senior ministry official told Reuters. Overstaffed and mismanaged, Olympic has struggled with chronic debts in the hundreds of millions of dollars. It posted a loss of 85.1 million euros last year but banked on a restructuring plan to turn it around in 2002. Olympic sources said the plan, which calls for a drastic curtailment of flights and staff reductions, has been effectively frozen since the sell-off bid under advisers Credit Suisse First Boston (CSFB) collapsed in February. «Nothing has been done since,» an Olympic union spokesman said. «Some staff who retired have not been replaced, but that’s it.» The government said after the failed sale effort that it was dropping CSFB, opting to hand over Olympic to three Greek banks. Sources close to the sale said the Greek bankers were looking for interested investors, but being more sensitive to local politics, they were reluctant to accept investors that might reduce staff numbers drastically. Among those who wanted to buy Olympic but failed to come up with the cash was Greek tycoon Pavlos Vardinoyannis, in collaboration with Olympic’s pilots unions. Sources said he had repeated his offer of about 110 million euros for 51 percent of Olympic but had yet to provide the financial guarantees. His last bid also failed for lack of cash. The Finance Ministry source said a Transport Ministry decision to sell Olympic’s catering subsidiary separately could be postponed pending discussions with Vardinoyannis, who would be interested in the whole package. But Transport Ministry officials insisted the Olympic Catering tender had already been assigned to an international house and an announcement was imminent.

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