ECONOMY

Olympic to drop route down under

Olympic Airways, the debt-burdened flag carrier, said yesterday it plans to stop servicing the Australian market with effect from November 1, prompting its pilots to threaten industrial action. Olympic said it had decided to drop the lossmaking route after failing to find a solution, including hooking up with other airlines in the wider region. Flights to the southern continent are believed to result in airline losses of 30 million euros annually. Market observers said high personnel costs and privileges afforded to pilots and air crews employed on the route were the principal causes for the heavy losses. Olympic passengers who bought tickets before the announcement, however, will be able to fly to Australia with Charter Air-Atlanta which yesterday signed an agreement with the national carrier to that effect. Last month, Olympic said it would stop flying to Australia, leading to howls of protest from Greek Australians and even the Australian Greek Orthodox Church. EHPA, the pilots’ association, yesterday threatened to launch industrial action in protest against the move. Pilots last month said losses incurred on the Australian route were due to the airline overpaying for its aircraft leases in half the time than is usual. Olympic’s decision to stop flying to Australia is in line with a restructuring plan launched this year, which includes dropping lossmaking routes, disposing of old aircraft and cutting back on costs. Last month, the airline launched tenders for the sale and leaseback of six Boeing 737s dating from 1991. It also called for bids for another nine planes more than 20 years old. Seeking to improve Olympic’s attractiveness to prospective investors, the government is also moving to sell off the airline’s non-core activities. The first subsidiary to be disposed off was the airline’s catering business, Olympic Catering, last month. Seat reservation arm Galileo Hellas is scheduled to be next. It remains to be seen how successful all these efforts will be in attracting investors to take up a 51-percent stake in Olympic. Privately owned Aegean Airlines on Tuesday said it might consider participating in a consortium bidding for Olympic. Pilots have linked up with Greek tycoon Pavlos Vardinoyiannis to express their interest.