Olympic Airways will relocate to the new airport at Spata come March next year following approval from the European Commission for the diversion of funds intended for plane purchases.
According to former management consultant Speedwing, Olympic needs some 70 billion drachmas to move its entire operation to the new airport. After years of being in the red -an 8 billion drachma loss was projected for this year prior to the oil and currency crises- the airline can only relocate with a massive injection of funds from the state.
Transport and Communications Minister Christos Verelis has stressed that the new location is essential to restoring the carrier to financial health. The airline’s future success depends on it taking up residence at the Eleftherios Venizelos airport, currently under construction, 27km east of Athens and touted as the hub of the Balkans, he said.
The recent EC ruling allows OA to use some of the government guarantees for the acquisition of new planes to finance its relocation. The commission had previously said it would not approve any more state subsidies for the national carrier. The change of mind came after Transport Commissioner Loyola de Palacio reviewed the Greek government’s request submitted in July.
Mr. Verelis’ plan to break the airline into two was also approved by the EC. The scheme involves spinning of OA’s debts into a separate company while another operation will form its operating core. Some 65% of the core operation is expected to be sold to a strategic investor who will also take over core management.
An invitation for expressions of interest in a stake in Greek state carrier will be published in the foreign press by December 15. By the end of the year, the government will have decided on the size of the stake, the national economy ministry stated.