OA to plead for lifeline

Olympic Airlines (OA) will appeal a recent decision made by the European Union, which ordered the state-run carrier to pay back hundreds of millions of euros in illegal state aid, as the government now appears to be less determined to shut down the loss-making airline. Transport Minister Michalis Liapis said yesterday that state-owned Olympic Airlines, and its predecessor Olympic Airways, will appeal last week’s decision ordering Greece to recover over 500 million euros from the airline – a decision which could spur its financial collapse. «The state has a plan with a start and an end. We are at a difficult point as the tender is also in process,» said Liapis as he entered a Cabinet meeting that included OA on its agenda. Last month Greece signed a preliminary agreement with a consortium of Greek-American investors to sell OA. However, the EU’s decision is thought to have hurt the government’s fifth attempt to privatize the airline. Just a few days before the EU decision was made public, Prime Minister Costas Karamanlis said that the airline «cannot operate in its current form» and that its employees will not be left out on the street, comments that fueled speculation that the airline was headed for a shutdown. The government estimates that OA costs the taxpayer about 1.5 million euros per day. Two previous attempts to bring the company into shape set the state back about 2 billion euros, according to government spokesman Theodoros Roussopoulos. Sources had said that Karamanlis is likely to prefer shutting down the air carrier as part of his government’s economic structural reform policy. However, in the last few days messages coming from the ruling conservatives indicate that Greece will take a more active role in keeping the airline flying. Karamanlis was quoted as telling the Cabinet meeting yesterday that the state’s main goals include securing a viable solution for OA as well as ensuring healthy competition in the vital tourism industry. Tourist groups have expressed concern about what will happen to their industry if the country’s airways are left in the hands of OA’s single domestic competitor, Aegean Airlines.

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