The search for a strategic partner for struggling Olympic Airways has become the central feature of a new restructuring plan now being implemented by the Greek national carrier.
The government, aware that Olympic has been brushed aside in the airline industry's global consolidation programme, has propelled its search for a partner airline further up transport minister Stassos Mandelis' list of priorities .
British Airways has already been linked with the possible acquisition of a shareholding in the carrier.
While agreeing with the government view, Olympic managing director Theodore Tsakiridis has urged that the process be pushed forward with speed, warning that "-a strategic alliance cannot be achieved under state ownership".
Before that happens, the airline will have to implement the latest 1998-2002 business plan agreed with the European Commission in exchange for approval of state aid from Athens.
Its efforts to return to profit to allow it to meet the competitive challenges internationally and domestically have already seen the dismantling of four of the eight management levels, unprofitable routes cut, the introduction of the Icarus frequent flier programme and a fleet renewal plan.
The more difficult elements, however, such as staff reductions, a three-year pay freeze and changes to working practices, are still to be introduced.
Olympic will also have to plug the gap in its income destined to be left by the imminent removal of its ground-handling monopoly. Benefits will eventually accrue, however, from the projected move to the new airport at Spata in March 2001, eliminating the present infrastructure shortcomings at Athens Hellenikon and its poor service image.
Over the next two years, the airline's ageing Boeing 747-200s will be replaced by five Airbus A340-300s, while eight Boeing 737-800s will replace the remaining Airbus A300B4s and most of its 11 737-200s. At the end of the plan, Olympic's fleet will total 40 aircraft, with an average age of seven years.
On the route structure, the airline will focus on high-yield routes, with only two more destinations to be added during the current plan, to Prague and Manchester.
With the failure of the previous business plan, Olympic's financial situation has deteriorated. There has been an estimated loss in the last financial year of Dr6.8 billion ($24.5 million), on revenues of Dr275 billion. Staff restructuring alone is expected to result in savings of Dr28 billion.
Autonomous subsidiary Olympic Aviation is also implementing a new business plan. Chief executive Petros Stefanou says the airline will expand domestically and regionally, and upgrade the turboprop fleet to jets. He plans to start 21 new routes over the next three years, introducing international services to such destinations as Bologna, Bucharest, Frankfurt, Istanbul, Larnaca, Milan and Tirana, all to be operated from a hub to be developed at Thessaloniki.
Olympic Aviation carries 1.4 million passengers to 45 destinations from Athens and Thessaloniki, operating a fleet headed by 12 ATR turboprops.
Source: Flight International
