November could go down in history as the month when Olympic Airways finally turned the corner in its perennial battle for survival. After the completion of a 12 week evaluation, the new BA Speedwing management team led by former Air Europe managing director Rod Lynch has submitted a business plan to the Greek Government and the European Commission.
The plan contains 333 specific actions which, if they are implemented, will guarantee its turnaround in operational and financial performance, says chief executive Lynch, and facilitate the final release of the third tranche of government aid worth Dra7.8 billion (US$25million) approved by the EU. This is geared towards privatisation of the airline.
Key elements of the plan are the renewal of the fleet and the sale of assets to fund it; network expansion through new routes and increased frequencies; a refocus and possible rationalisation of Olympic's subsidiaries; skills and service training for staff; and the wholesale move of the technical base to Athens' new Eleftherios Venizelos International Airport at Spata, due to replace the present airport in March 2001.
The arrival of a BA executive at the helm of this loss making carrier raised the expectation of a radical attack on costs, particularly on the labour front. But Lynch instead proposes to increase staff by 1,000. This has helped smooth the way to an agreement with the Olympic unions, which guarantees a wage freeze for two years in exchange for some improvements in fringe benefits.
Lynch believes the international airline experience of the new management team and its demonstrable hands-on approach boosts the chances of a successful completion of the carrier's latest business plan.
Certainly, government interference and weak management of the airline appear to be a thing of the past. Transport minister Anastasios Mandelis has been quoted as saying that the new managers "have been granted complete freedom regarding the management of the Group."
His government's priority is meeting the conditions for membership of the European Monetary Union, for which Greece will apply in March.
Source: Airline Business
