Olympic Airways unfair competition ?

[janpieter]

EU probes aid to Olympic Airways. .. .The European Commission has launched an investigation into whether the Greek government violated EU fair competition rules by helping Olympic Airways, the country's struggling flag-carrier. . .The inquiry will centre on the legality of loan last month of 19.5 million euro ($17m) by the state-controlled Commercial Bank of Greece. . .. .The government announced a restructuring plan for Olympic last month. . .. .The plan included 2,000 job cuts, a reduction in routes and moves to separate the core airline operations from the debt-burdened group. . .. .It also involved a hefty injection of funds to keep the company afloat. . .. .The Commission said it would investigate the legality of the aid, which was "apparently aimed at redressing operational difficulties." . .. .It will also look at into aid authorised by the government in 1994 and 1998. . .. .If Greece violated EU rules, Olympic may be asked to pay back millions of dollars. . .. .Analysts say this could lead to bankruptcy for the Olympic, making it the third major European airline after Swissair and Sabena to go bust since 11 September.

[GreekDrv]

It is strange that there seems to be no interest in that issue on this forum.An arlier post just disappeared from the forum.. .It is time for the dreamers in OA to wake up and face the real world.There is a widespread oppinion. .that OA will always be there, and they thought they could continue like this forever.. .OA just recently published the results for the year 1999.No books closed for 2000 yet. Something to hide?. .OA does not pay social security for their employees on time. Only after they are long overdue.. .For years they just kept the "Spata-charge" for themselves.This is a surcharge imposed on every ticket to and from a greek airport, intended to be used for the construction of the new Athens airport at Spata.. .Repeatedly they receive credits from state-owned banks, to cover running expenses.These banks are advised to give the credits by the government,because no private bank would throw it`s money at OA, where it is lost anyway.. .They have also used money intended for the renewal of the fleet, to cover running expenses.. .. .PRIVATIZATION: . .What a joke!!. .They asked for bids from interested parties, to buy OA.. .No airline with a serious background made an offer.. .Among the parties making an offer were . .. .-Cyprus Airways(did not have the money,wanted to impose a realistic businessplan,which meant less employees,which in turn meant the government would not accept this,because many OA employees got their job as a gift in return for their vote). .. .-Cronus/Aegean (Never made a buck with their ops and this was too big for them anyway). .. .-Axon Airlines (At the time had 2 B737 and was owned by a weapon dealer, who has made business with the greek government in the past.Obviously he had the members of the greek government by the balls,because they tried everything to give OA away to this guy, although it was obvious, for everybody having no vacuum in his head,that this so called airline had no chance of supporting an airline operation of the size of OA.The negotiations fail and Axon goes bankrupt the same week... Now what an embarassment for the government,having wasted months of OA`s valuable time to negotiate with this moneylosing outfit). .. .-IAS (Integrated Airline Solutions) Known as the "australians". A so called venture capital firm, allegedly from australia,or lebanon,or maybe Aigaleo? Nobody knows.... .However they told everybody they would develop OA into a major outfit,expanding the longhaul network, and promising whatever you would like to hear, when you see yourself ending up with no job soon.The pilots decided to be part of this , investing money from their solidarity fund.Now we have a businessplan, expressing the wishful thinking of the desperate, rather than a realistic plan to stay afloat.One after the other the investors leave the scheme.At the day of the deadline the pilots and another "investor", a member of the Vardinogiannis family are supposed to present bank-guarantees for their stake in the offer. The pilots do present their`s, but the sole other person remaining in the scheme is not able to present a valid bank guarantee.. .. . The so called privatization fails, and now the government has to come up with a plan to keep OA alive.This becoming more and more difficult, after having lost another 15 months of valuable time.. .. .Now the government announces its plan:. .. .-Separate flightops from the rest of the group. .-Reducing the workforce by 2000 people in the next 2 years.. .-Stop lossmaking routes.. .-Reduce the fleet by 15-20 aircraft.. . (The 737-200s have to stop operations for noise reasons,longhaul operations are a candidate for cuts) . .-Integrating the flight operations of Olympic Airways,Olympic Aviation and Macedonian Airlines into one entity.Rumours are talking about reducing the pilots` number by 150.(This should be easily achieved, by letting these guys sort out their seniority...). .. .Now wasn`t it part of the plan of BA,when they did the management and made an offer for the majority stake of OA?Turning OA into a viable regional operator? They were sent away ,being accused for failure, just after 11 months of a 30month managementcontract. I have the feeling,that this was a big mistake.. .. .Now we have this investigation from the European Commission. If they rule OA has to return money, because it did not play by the rules, then they will have to come up with something new, because advising a bank to pay them money will be out of the question then.. .. .It is sad, to see this "achievement" in a country predestined to support a succesful airline,by its geographical location,the number of tourists visiting it,the numerous islands,that need to be connected by air.

[crewrest]

What a mess.

[Exclusive Mandate]

Olympic has been an embarrassment to Greece for sometime. If the EU do not act quickly, it will become an embarrassment to them. They must not allow any further muddying of the waters in terms of Greek government backed financial assistance.. .. .How the commission stop this is not easy. The only idea I have is they request each EEA state to ban the operation of OA aircraft in its airspace. That will give the Greek authorities something to think about should they not pull the plug.. .. .Someone out there can make money out of the Greek market and put on a decent service....However, not whilst OA is around. . .. .It needs to die soon, very very soon.

[737type]

You know, it's really a shame. I feel, as a Greek, so much pride when I see an OA 74 or 340 in BOS or JFK but I've also been following the long sad saga of this state enterprise.. .. .GrkDrv's points are right on the money. The books of this operation are totally "plastic" (as is the case with some other state airlines). They're simply based on constant state infusions meant to prop up an airline which, at the very least, is employee heavy and mismanaged. OA had become the biggest "rousfetti" (old Ottoman term for bribe/political favor) of Parliament. People at all levels were being hired based on who they knew and not what they knew. . .. .Granted, I never worked for them, so I don't know all of the "ins-and-outs" but as a passenger it doesn't take long to spot the evidence.. .. .The fact that the EU is launching an even bigger investigation into OA only means that the end can't be far away. . .. .I just hope that whoever picks up the pieces keeps both the Olympic and the Macedonian name. It would be a real shame if they both disappeared from the sky.

[Anti-ice]

I Nightstopped in ATH last night , and according to a local magazine - Olympic is dropping longhaul operations,and selling off the shorthaul operation altogether <img border="0" title="" alt="[Eek!]" src="eek.gif" /> I had to read it 3 times to believe what i was seeing , - after all the propping up they've received, is this a wind-up or . . .???

[tetraNG]

Greek press states that European Commission is very angry with Greek Government about the last loan received from Commercial Bank backed up with State guarantee. But on the other hand everyone seems preety happy here in Athens that everything will go fine and that Olympic will never stop flying.