By Jean Christou
A DECISION on who will win the race for Greece’s Olympic Airways is expected to be announced on Monday, reports from Greece said yesterday.
According to an article in the Financial Times Cyprus Airways (CY) is the favourite runner, although it says the Greek government would probably prefer a local investor as it would be less likely to lay off staff.
But the FT said the two Greek bidders, Axon and Restis, “cannot lay claim to a triple-A rating”.
Axon, a consortium of Greek tycoons led by the Liacounakos groups, knows something about the airline business, but the paper said the carrier itself, and at least two of its partners, were strapped for cash.
The Restis shipping group was not in much better shape, the FT said, and had recently defaulted on an interest payment for a junk bond issue.
CY on the other hand would have no problem financing new planes “and since it is run by Greek Cypriots, the top brass won’t need an interpreter in arguments about job losses.
The results of the bidding should already have been announced nine days after the May 14 deadline for tenders, but sources said yesterday it might be further delayed.
Newspapers in Greece have been rife with reports on the problems involved in the deal to privatise the ailing Olympic, saying the Greek government did not yet know which parts it wished to privatise.
They also said the confusion has created huge staff problems, and in particular friction between pilots and management, which has led to cancellation of some flights.
All three bidders have demanded that the Greek airline be sold with a clean slate.
Olympic has only once made a profit in the past two decades, is saddled with debts of more than 40 billion drachmas (approximately £66.7 million) and is expected to lose at least half of that amount again this year.
CY submitted its bid for the ailing airline only after weeks of discussion among board members following strong concerns over the lack of detail on the airline’s financial status.
The board eventually agreed to make the bid, but only under certain conditions, which referred to “guarantees, facilities and obligations” the airline judged necessary to safeguard its own interests and the viability of the new Olympic Airways.
