Greece says Olympic Air rescue unlikely

ATHENS, Dec 7 (Reuters) – Greece said on Friday a rescue of its ailing Olympic Airlines was unlikely but the state company could shut down and reopen debt-free.
“Our first aim is to rescue the airline exactly as it is but this is not the most likely scenario,” Transport Minister Kostis Hatzidakis told parliament. “A new company can be created, along the lines of Israel’s El Al, which closed down one day and opened the next, debt-free.”
Budget airline Ryanair said last month it was suing the European Commission for failing to act on the Irish company’s complaint that the Greek government provided illegal state aid to Olympic.
The Commission first ruled in 1996 that Greece was in breach of EU state aid rules.
After efforts to find a buyer failed, Olympic Airways was split into two units in 2003 – a debt-heavy services company and a debt-free carrier, Olympic Airlines. Brussels still regards it as one company.
Olympic lost its commanding domestic position in 2006 to its main competitor Aegean Airlines, which won a 51 percent market share due to an aggressive expansion, more routes, newer planes and better services.
Hatzidakis said the government hoped it could transfer Olympic’s name, logo and slots to the new company.
“We want to avoid a vacuum, we want a different, healthy airline,” he said. (Reporting by Athens bureau, Editing by Erica Billingham)

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