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September 22, 2008

End of an era for Olympic. But please don't strike before I've flown, OK?

Olympicplanes A long running Greek saga is beginning to draw to a close, as the Government and the EU have finally agreed on a plan for what to do with national carrier Olympic Airways. It was in 1994 that the EU first began complaining that the Greek government was distorting the market for air travel with illegal subsidies to the company.

By the end of next year the intention is to split Olympic into three companies, so that flights, maintenance and ground staff are no longer one big state-owned monopoly.

The numbers involved are staggering. According to last week's Athens News, the European Commission says that since it last ruled against Olympic receiving €724m is illegal state aid in 2005, Olympic has received a further €850m from the Government. And even with all that taxpayers money, the company can still not turn a profit - it is expecting to post a €400m loss this year.

The replacement company will not take on all of Olympic's 4,600 staff. Some will have to take early retirement, and the rest who do not join the new airline are to be given other public sector jobs. What price a meritocracy eh? Oh, €1.2 billion it seems, which will be the cost of the re-staffing plan, which seems to include giving ex-staff €500 monthly bonuses to make up for their income loss.

The staff, unions and opposition have reacted the only way they seem to know in Greece - which is to ignore any economic reality, and insist that if only the Government restructured the management and pumped in more money, then Europe's last totally state-owned airline would be able to compete in the modern transport marketplace. According to ERT "Opposition parties described the Olympic Airways issue as a sell off of public wealth to investors". Olympic is €2.7 billion in debt.

Riot police had to intervene to prevent disgruntled staff gate-crashing the Transport Minister's Press Conference, and they have already staged a sit-in at a company office in Athens.

My worry now is that I've got six over-priced Olympic flights booked to and from Crete in the space of the next few weeks, and it seems almost inevitable that there will be strikes...

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