Greece begins search for Olympic Air investors

By George Hatzidakis
ATHENS, Sept 26 (Reuters) – Greece’s privatisations committee on Friday gave the green light for the launch of a tender to find buyers for three new companies to replace ailing flag carrier Olympic Airlines.
Greece’s conservative government announced last week it would break up the troubled airline, ending years of wrangling with Brussels over illegal state aid, with a view to fully privatising it.
“Competitive procedures to choose private investors to buy the three companies — flying, ground handling and aircraft maintenance — will start,” Greece’s privatisations committee said in a statement. “The procedures will proceed as planned.”
The new airline will retain Olympic’s name and trademark — the five Olympic rings that symbolise the five continents.
The ministers of finance, development, transport and labour make up the privatisations committee.
“We are moving to rid citizens of the burden of Olympic Airlines … a burden that costs Greek taxpayers millions of euros each day,” Prime Minister Costas Karamanlis said at a party conference on Friday.
The airline, founded by shipping tycoon Aristole Onassis in 1957, is losing nearly 2 million euros ($2.93 million) a day, and had accumulated debts of 2 billion euros as of last year.
The European Commission has approved the Greek government’s plan to break Olympic into divisions covering flights, ground handling, and maintenance, which would be sold to investors by 2009. So far no suitors have stepped forward.
The Commission has also ordered Olympic to repay 850 million euros in illegal state aid it received between 2005-2007, but Greek officials say most of this is unlikely to be returned.
Late on Thursday, Transport Minister Kostis Hatzidakis tabled amendments to a bill in parliament that would allow the airline to be placed under a “special liquidation status”, offering the carrier protection from creditors.
But the bankruptcy status would not mean the airline would cease operating. Under the plan, Olympic will continue to fly until owners for the new company are found. The amendments will be voted on next week.
The architect of the plan, Hatzidakis has said Olympic’s 8,000 employees would be redeployed at government agencies or compensated.
Unions turned down his invitation for talks, pledged to take their opposition to the streets, and have called a strike on Oct. 1.
The agreement to sell Olympic has also drawn stinging criticism from opposition parties, but the government said it has decided to end a “30-year-old problem” which burdens taxpayers. (Editing by George Georgiopoulos and Simon Jessop)

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