OA running out of air

Credit Suisse First Boston (CSFB), the government’s adviser on the privatization of ailing state airline Olympic Airways is examining the possibility of the airline going bankrupt through lack of cash, according to reliable sources. Olympic is losing money to the tune of 6 billion drachmas (17.6 million euros) per month and is expected to lose about 75 billion drachmas (220 million euros) in 2001. Company officials have said a better-than-expected summer season meant that there is enough cash until spring 2002. Yesterday was the deadline for CSFB to submit its recommendation concerning the two rival bids for a majority stake in Olympic. The deadline has passed, but CSFB is expected to submit the recommendation next week, after the expected Cabinet reshuffle, government spokesman Dimitris Reppas told reporters on Wednesday. The two rival bidders are Greek private airline Axon, owned by businessman Thomas Liakounakos. The government appears to favor his proposal. The rival bidder, Australia’s Integrated Airline Solutions (IAS), a services company, has enlisted the aid of Olympic’s pilots and Australian airline Qantas. CSFB is expected to recommend that the government either accept Axon’s bid or that it reject it and begin talks with IAS. Whichever option the government chooses, however, the possibility of the cash-strapped airline’s bankruptcy will loom large. It is said that the government intends to undertake yet another restructuring of Olympic Airways, cutting back on long-range flights. The same sources say that the government is also considering a program of voluntary redundancies for 2,000 employees. Both bidders have said they would make even deeper cuts in the workforce. The government is barred by the European Union from injecting any more money into Olympic. However, it may choose to pressure the EU over the restructuring, presenting it as the only alternative to bankruptcy. Soccer. PAOK Thessaloniki beat the Czech Republic’s Pribram 6-1 yesterday on the first, home leg of a second-round match for the European UEFA Cup. AEK Athens beat Croatia’s Osijek 2-1 in an away match for the same tournament.

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