Plans laid out for ‘new’ Olympic Air

The government hopes private investors will be interested in a majority stake in a new Olympic Airways, trimmed down to its core operations and freed of its crushing debt. Prime Minister Costas Simitis gave Transport Minister Christos Verelis the green light for creation of the new company and an amendment is to be brought to Parliament soon. «The crucial issue concerning us now is the immediate search for private interests that will participate in the new Olympic Airways with a majority package that will exceed 51 percent,» Verelis said after the meeting, which included National Economy Minister Nikos Christodoulakis. Sources said negotiations are being held with banks and serious investors in order to find a credible solution. The European Union is pressing for information on Olympic’s restructuring, time is limited and the government is wary of the political cost of the venture. The new company will require initial capital of between 70-90 million euros, on condition that it can be freed of the burden of the «old» Olympic Airways. In July, Olympic reported a half-billion-euro accumulated net loss as of end-2001. The European Commission insists that Greece reveal its plans to help the national airline to see if they conform with EU rules banning state aid to the sector. «They cannot take any decision without discussing it with the Commission first,» Gilles Gantelet, spokesman for EU Transport Commissioner Loyola de Palacio, said on August 6. «The Commission will have to study it and see if everything they are doing is compatible with EU rules,» he said. The Commission already plans to take Greece to court over 194 million euros of past aid it alleges Athens paid Olympic illegally. Verelis, however, insisted that «The solution that is at hand is compatible with the rules of the EU. It is a solution that provides the greatest possible benefit to the Greek State and closes the issue of the company which for 25 years has created problems and expenses for Greek taxpayers.» The airline will combine the flight operations of Olympic Airways and its subsidiaries Olympic Aviation and Macedonian Airlines.