Olympic Air’s new owners face tough unions, rival
reuters
By Harry Papachristou
ATHENS, April 9 (Reuters) – Greek lawmakers approved on Thursday the privatisation of Olympic Airlines after years of failed sale efforts as angry labour unions said they were determined to disrupt operations.
The Greek parliament ratified Olympic’s sale to Marfin Investment Group (MIG) (MRFr.AT: Quote, Profile, Research), Greece’s biggest buyout company, for a total of 177 million euros ($235.1 million).
MIG faces stiff competition at home and abroad while Olympic unions pledged walkouts, saying the government had been short on details on a plan to reassign staff to other public services and they feared significant pay cuts and job losses.
Technical staff staged a warning three-hour walkout on Thursday and said more action is on the way.
“If we get no assurances that the plan will be implemented there will be strikes,” said Kleanthis Tratras, a labor union member at Olympic’s maintenance unit.
The government has announced a 1.2 billion euro package including compensation and government jobs for employees who quit Olympic or won’t be rehired by its new owners.
“Just show us the money and tell us where the new jobs will be,” said Markos Kandilakis, Chairman of Olympic’s umbrella union OSPA, which represents 7,000 employees.
Apart from labour reaction, MIG faces a series of other obstacles in turning around the ailing Olympic, analysts said.
“The international crisis makes it much more difficult to turn around an airline that has already very poor marketing,” said Rigas Doganis, a visiting professor for aviation at Cranfield University in the UK and former Olympic chairman.
Olympic will also face sharp competition from domestic rival Aegean Airlines (AGNr.AT: Quote, Profile, Research), whose bid to buy Olympic Air was shrugged off by the government on competition grounds.
Aegean, a smaller airline with about 2,400 employees, has overtaken Olympic in Greece’s domestic market. Foreign carriers control the biggest part of Greece’s airline market.
“A merger would have made sense. The two airlines duplicate each other,” Doganis said.
Weighed down by mismanagement under state ownership, Olympic piled up losses of 2.6 billion euros since the 1990s.
MIG, whose biggest shareholder is Dubai Financial, assumes Olympic’s management in October and has not detailed its plans. It said last month it expects to make Olympic profitable by 2011. (Reporting by Harry Papachristou; Editing by Jon Loades-Carter)