Axon Airlines SA, Golden Aviation Services (the Restis shipping group), Integrated Airline Solutions and Cyprus Airways deposited new bids for the purchase of national carrier Olympic Airways. As we go to press, bidders are said to be on their way to London to discuss the bids with tender consultant Credit Suisse First Boston.
If there is a winning bid, and not just an interim-winning bid, it will be announced during the first days of July. In any case, government said all would be over by October.
The sell off is seen as the ailing national carrier’s last hope. Olympic has no working capital to pay for staff wages or fuel – the airline has posted profits in just one year out of the past 23. Increasing summer holiday business may temporarily improve the company’s cash flow but the general consensus is that Olympic will have run out of money by October.
By the date, the worst-case scenario, should the sell off fail, is that the company will be split and sold in parts. Meanwhile, the hope is that the new bids are worthy.
Airline Solutions is now back in the tender due to the recent extension. The Australian-based consortium, coupled with U.S. and Greek investors, was excluded from the May 14 first round of tenders after requesting a 10-day delay before tabling its offer.
Press reports say the venture’s bid appears to be the best. It includes 145 billion drachmas (425 million euros) for at least 65 percent of OA, including the divisions spurned by others, notably its technical base and Olympic Catering.
It is also said to sport a strategic alliance with US-based United Airlines, and has U.S. and Greek institutional investors as financial backers. Furthermore, OA’s pilots support the bid.
Contrary to all other bidders who plan to slash Olympic’s workforce down from its current level of 8,000 to 3,000 (Axon), 4,000 (Cyprus Airways) and 4,300 (Restis), Airline Solutions says it will keep 7,500 OA employees. As well, the Australian venture is the only contender pledging to maintain, and even expand, OA’s routes.
According to the reports, the group believes in Olympic’s brand name, especially ahead of the 2004 Olympic Games to be held in Athens.
The bid from Cyprus Airways, once considered the outsider, now includes a comprehensive business plan, despite a rather low bid price -somewhere between 20 and 30 billion drachmas- for 51 percent of Olympic. It is said to be interested in airline’s European network, and perhaps the Athens-New York route.
As well, reports outside say the carrier has been in touch with Alitalia and Frankfurt Airport on bringing them into a consortium that would take over OA.