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Olympic Does An Alitalia  
User currently offlineMonkeyboi From United Kingdom, joined Oct 2004, 457 posts, RR: 3
Posted (10 years 1 week 5 days 21 hours ago) and read 3449 times:

Yet another debt ridden money losing european carrier is being subsidised by it's government.

What is the point of even having EU rules against government subsidies when Greece and Italy blatantly break them??

From todays FT:

Seven European airlines including British Airways, Germany's Lufthansa and Iberia of Spain, have attacked state aid to Olympic Airlines, the struggling Greek carrier.
The airlines claim in a letter to the European Commission that despite its restructuring the Greek flag-carrier continues to receive support from the government.
The attack comes as the Greek government launches fresh efforts to sell off the airline as well as related aviation businesses.
Greece has appointed Lazard, National Bank of Greece, Emporiki Investment Bank and Alpha Finance as advisers to review strategic options and implement the privatisation of both Olympic Airlines and Olympic Airways Services.
At the end of 2003 Greece broke up the heavily loss-making Olympic Airways into different businesses.
The flying operations were transferred into the renamed Olympic Airlines, while the rump Olympic Airways was renamed Olympic Airways Services to include the ground handling, cargo handling, technical maintenance and training businesses. The Greek government is being investigated by the European Commission for breaches of state-aid rules over an estimated €150m ($200m) of funding.
A separate state-aid case concerning Olympic has already been brought by the Commission to the European Court of Justice over alleged aid totalling €194m and a judgment is expected from the Luxembourg court in the first half of next year.
The letter to François Lamoureux, director-general of the energy and transport directorate, alleges that the Greek governmnent has continued "to circumvent EC state-aid rules".
The Greek government had replaced Olympic Airlines as the lessee for four Airbus A340-300 aircraft with rental costs of €329m between 2005 and 2011.
"Since Olympic Airlines is unable to pay the costs for the remaining leasing period, the state will now assume the responsibility."
Olympic had repeatedly been granted "generous state support in spite of its chronic deficits", said the airlines, which estimate the Greek carrier's losses in 2003 alone at €220m.


22 replies: All unread, jump to last
 
User currently offlineOlympicbis From , joined Dec 1969, posts, RR:
Reply 1, posted (10 years 1 week 5 days 21 hours ago) and read 3385 times:

Yes , this is indeed not nice, is a direct breach of European competition legislation.
However, I do not understand why nobody quotes Ryanair and its likes, who are also subsidized - in an equally unfair way if not worse - by regional authorities in severals forms : not having to pay the official landing rights, handling fees and so on... We have a good example of thiskind of stuff in Belgium with Charleroi Airport and the - corrupt - local authorities - I live in Belgium so that's why I allow myself to talk about it.

Olympic deserves to be grounded, period, as it has unfortunately become a " flying trade union " and the vast majority of its staff are not able to fulfill their jobs correctly because they are incompetent, got their job through political acquaintances... A hopeless situation.

But I do believe that the subsidized low-costs should be taken care of with even more priority, they are a much greater threat than Alitalia or Olympic will ever be....


User currently offlineWesternA318 From United States of America, joined Oct 2004, 5726 posts, RR: 24
Reply 2, posted (10 years 1 week 5 days 19 hours ago) and read 3253 times:

I'm greek, so I guess I can comment.

Someone like Frank Lorenzo or Carl Icahn should go to Grewece and take over Olympic. That way, Some REAL Managaement team can come in after them and put the pieces back together. The OA leeches (employees) will go on strike again, but who cares? Everyone in greece strikes, even parents.



Check out my blog at fl310travel.blogspot.com!
User currently offlineUA744KSFO From , joined Dec 1969, posts, RR:
Reply 3, posted (10 years 1 week 5 days 19 hours ago) and read 3226 times:

I'm not Greek, but I'll comment nonetheless.

Frank Lorenzo and Carl Icahn? What are you smoking?????? Just because one of the airlines owned by Lorenzo survived, don't forget how many he destroyed.



User currently offlineWesternA318 From United States of America, joined Oct 2004, 5726 posts, RR: 24
Reply 4, posted (10 years 1 week 5 days 19 hours ago) and read 3219 times:

That's my point. Olympic as a viable airline needs to be killed off, brought to the brink or dismantled by a tyrant. That way, if there is anything left, a real team can rebuild from the ruins. If it's killed off, one more loser airline off the world's air routes


Check out my blog at fl310travel.blogspot.com!
User currently offlineTango-Bravo From United States of America, joined Jun 2001, 3806 posts, RR: 29
Reply 5, posted (10 years 1 week 5 days 19 hours ago) and read 3190 times:

Someone like Frank Lorenzo or Carl Icahn should go to Grewece and take over Olympic.

But what assets could they sell and then pocket the proceeds?  Big grin


User currently offlineETStar From Canada, joined Jan 2004, 2103 posts, RR: 7
Reply 6, posted (10 years 1 week 5 days 19 hours ago) and read 3175 times:

I wonder if US airlines and Bush will file a complaint with the WTO, since they already do based on Airbus "subsidies". Or does this not matter since it does not affect their bottom line?

User currently offlineIakobos From Belgium, joined Aug 2003, 3316 posts, RR: 34
Reply 7, posted (10 years 1 week 5 days 18 hours ago) and read 3123 times:

Olympicbis (premonition ?), welcome to the forum

Charleroi airport and Ryanair were condemned and rightfully so (and I am Belgian...).
Still, Charleroi (a region with 25% of unemployment) giving some (publicly known) "incentives" to an operator in order to incite it to develop its activities and hire personel has a very different conotation than a government keeping (the least public as possible) an airline at arm lengths to the tune of hundreds of millions a year for decades is a very different matter.

BA did (try to) manage Olympic about 6 years ago, when they realized that the disease was irreversible they packed and left.

Today, nobody knows the extend of OA's holes, to the point that the last manager declared that any buyer could have it all for a symbolic 1 Euro.
We will see if the present (center right) government is politically prepared to get the bull by the horns.


User currently offlineSXFAN From Greece, joined Jan 2004, 371 posts, RR: 13
Reply 8, posted (10 years 1 week 5 days 16 hours ago) and read 3026 times:

I am with you in the grounding of OA and AZ but we all have to bear in mind that there is none airline ready to cover the gap of the absence of those two airlines. In Greece the only other rival (Aegean) is unable to handle flights to U.S.A, Canada, South Africa or even Europe and since the Greek flag carrier is the only one in the region that can handle this task this is why the government keeps on giving kisses of life to Olympic.
An other reason why the Greek government refuses to leave OA on its curse is because it is the only crucial operator of LGAV and the internal flow of cash
(government owned airport and government owned airline) will seize to exist and then the El. Venizelos airport will suffer major consequences (already Hochtief- Hi Iakove) is ready to sale a percentage of its shares to a third party and the government is not happy with a new person (company) interfering in the operations of Athens airport.
But apart from those reasons the main purpose of BA and LH and even Iberia is to harm more OA in order to achieve a better price....  Big grin
The Greek government be sure will not let Olympic die because is of an important strategic role for the whole country (connects remote islands, most of all transports politicians and prime ministers and so on).
It is a practice of many European governments not to obey the EU's regulations and pay the cheque afterwards instead of closing airlines, telecommunication companies, and many others...
I am of the view that something must be made with the problem of OA but since there is no one willing to buy an indeed problematic (but very promising airline mainly because of the region) the politicians will keep on helping (in a tragic way) the airline.
Btw the crews of OA are not incompetent at all. Many of the pilots of the airline are of a great experience since they are former fighter pilots and they are on demand by many international airlines. The managers though they are a disgrace to their occupation...
Cheers
Vasilis

[Edited 2004-12-15 03:19:06]

User currently offlineWesternA318 From United States of America, joined Oct 2004, 5726 posts, RR: 24
Reply 9, posted (10 years 1 week 5 days 14 hours ago) and read 2959 times:

Bravo re vasili!

I couldn't have said it better myself. Now if we can find some GOOD managers to come from certain places in the world to Greece and run the show, OA will be fine.



Check out my blog at fl310travel.blogspot.com!
User currently offlineLufthansa From Christmas Island, joined May 1999, 3224 posts, RR: 10
Reply 10, posted (10 years 1 week 5 days 13 hours ago) and read 2911 times:

Let them fry.

How long did it take SWISS international to form after the old swissair went under? I mean it was almost overnight and there was a new entity. Not to mention more than a good enough service from neighbouring countries. Granted, Italy and Greece are a lot bigger and further away than switzerland, which was really heavily functioning as a hub anyway (much like KLM), even so, I think, if they can't pull their wait...they should go under.

It isn't fair on AF-KL, BA, LH, SK etc etc etc to allow this to continue. If these countries feel the need to do this still... i think it is time for them to hand back their EU passports and go alone. They can't have it both ways. They either play by the rules...or they should be kicked out. Otherwise it sets a precedent. Why shouldn't a textile or a food industry then demand help in the fashon of Alitalia or Olympic? And if that is the case, whats that gonna do to hard working Northern europeans? They'll once again end up paying for the mistakes/mismanagement/curruption of the south...and if you let that go ahead your likely to see a new breed of governments in northern europe that will just outright refuse to work with southern europe.

Seriously... they've got to get their shit together or get out.


User currently offlineLutfi From China, joined Sep 2000, 780 posts, RR: 0
Reply 11, posted (10 years 1 week 5 days 9 hours ago) and read 2808 times:

Vasilis, you say

"most of all transports politicians and prime ministers and so on". as main reason to keep this basketcase flying.

Wouldn't it be cheaper for them just to buy tickets on other airlines....?

Note, that once the EU liberalises ASA with other countries, then any EU carrier will be able to fly ATH-NYC,SIN, whatever as they wish.


User currently offlineScotron11 From United Kingdom, joined Feb 2004, 1178 posts, RR: 3
Reply 12, posted (10 years 1 week 5 days 9 hours ago) and read 2789 times:

Hopefully the day of truely Open Skies happens soon. Apart from NYC and Europe, where else does OA fly to?

User currently offlineIakobos From Belgium, joined Aug 2003, 3316 posts, RR: 34
Reply 13, posted (10 years 1 week 5 days 8 hours ago) and read 2756 times:

Managers, whoever good they might be, are useless in OA's case.
This has been proven by BA taking the wheel at OA in '98/'99 and leaving in disgust.

All governments until now have been unwilling to change anything of substance to the big cow, almost all (if not squarely all) appointments at OA, from the cleaner up to the top manager and administrators are politically biased and the "chosen" staff are consequently protected.
For the unaware, mind you, when a new party comes in the lead chair, it is a custom here to change your party affiliation overnight. So far for the personal pride...

I oppose the outdated concept of a "flag carrier", that was fine in the 60's but does not make sense in today's "it's all about economics" society.
If there is a market here, be sure that other companies will be happy to fly in and out, leave the pride at home or for the yearly national day parade.

One local specificity of course is the necessity for an extended domestic network. I am sure that the EU would have no issue with the Greek government subsidizing a local domestic carrier/service, simply because this is an absolute necessity (and not only for Ministers).

Vassili (Hi): It is a practice of many European governments not to obey the EU's regulations...
sorry, but this is not true and a poor excuse used extensively here to justify everything.

Do you mean BA, LH or IB would be parties interested in taking over the bones of OA or OAS ?
I think nobody is interested
Be sure that if the government cannot find a buyer this time (the 5th), the EU will draw the line.



User currently offlineMonkeyboi From United Kingdom, joined Oct 2004, 457 posts, RR: 3
Reply 14, posted (10 years 1 week 5 days 8 hours ago) and read 2735 times:

Thanks for all the input guys......But even with new management can Olympic ever really thrive???

How many chances should an airline get at 'new management' or 'restructuring' before it is finally allowed to succumb to market forces and die? Greece would never be left without an airline (look at Swiss or SN Brussels). A new, leaner airline with low debt and little old time labour legacys would simply enter the market and take over.

Let's not forget that the 'old' Olympic Airways was re-structured as the new, re-organised 'Olympic Airlines' and yet all the original problems seem to persist and it continues to bleed money.


User currently offlineOlympicbis From , joined Dec 1969, posts, RR:
Reply 15, posted (10 years 1 week 5 days 8 hours ago) and read 2722 times:

Hello Iakobos, and thank you for the nice welcome words.

You are absolutely right, BA, IB and LH intentions are definitely not "honest" about this matter, especially BA and their paneuropean " monopolistic" dreams. As far as IB is concerned, they might have posted some profits recently but I personally would wonder how long this would last, as they definitely are miserable as far as their service is concerned. They should be the last to give lessons to others on that field.

Now SXFAN, I do absolutely agree with you about the renowned quality of the Olympic Airways pilots. I was once a very frequent flyer on OA, with a Gold Icarus status, flew all their 734's and 732's, flew all their 727-200's which I miss so much - SX-CBD "Mount Helicon " was my preferred one,their A300's flew even on their YS-11's...It is the cabin crews which are inconsistent. I had wonderful flights the one day, horrible ones the other day... no matter which class you would be flying. But I also will never forget the Olympic I used to know when I was a child, a top class carrier with an outstanding reputation. Even celebrities and movie stars flew Olympic. Each flight was a dream.
Yes, they need areal Management, with a true strategic vision. They need a fleet revamp, a serious upgrade of their onboard service & IFE. Onboard service is more a problem of the FA's overall attitude. Usually, and you can still read that on Skytrax or Airlinemeals, food is of good quality and generally even in Y-class far above what BA, LH and IB will ever be able to offer on similar routes. But FA's.... again, you may expect the best and the worst..... Sentimentally, I do wish the best for Olympic, although I also think that if it were to disappear, even if I would find it very sad, some people who "work" for Olympic deserve it, they have taken it for granted for too long.

Cheers


User currently offlineMonkeyboi From United Kingdom, joined Oct 2004, 457 posts, RR: 3
Reply 16, posted (10 years 1 week 5 days 6 hours ago) and read 2653 times:

Sentimentally I also wish for Olympic to survive. My parents are greek and my first flight ever was on an Olympic 747 Classis from Sydney to Athens.

HOWEVER.......I really think the government needs to butt out and let the inefficient carrier fail and out of it something new will start with enthusiastic and passionate workers.

I think the staff at Olympic are under the same illusion as those at Alitalia.....they don't need to improve their efficiency, to give better customer service or go the extra mile because they will ALWAYS have their jobs because the government will NEVER allow Olympic to fail.

Maybe if there really was the threat of the government NOT stepping in, then the cabin crews and ground staff would give their all to lose their 'civil servant' mentality and make Olympic a world class airline once again.


User currently offlineSXFAN From Greece, joined Jan 2004, 371 posts, RR: 13
Reply 17, posted (10 years 1 week 5 days 5 hours ago) and read 2611 times:

Re-cap...

1.Lufthansa I hope you are kidding...
The southern Europe is not the problem of the E.U. do not forget that the Union is based on the Greco-Roman culture. The Union is not only an economic union but a cultural and social one as well.
What the Greek government is doing is not a good thing but is indeed a common practice in Europe and not only in Europe.
If you think of the southerners as lazy stupid guys you are wrong.
Greece is not Switzerland (a non member country) and Olympic is crucial for the domestic network that connects remote islands such as Kastelorizo with mainland Greece.

2. I can't say that I am not biased in favor of OA but I believe as well as the majority of the participants on this forum that something must happen in the very near future leading to a solution on this problem.

3. Looking at it from another perspective the pilots of OA might be of a high experience but they are the reason why Olympic is in this situation. They are the hard core of the unionised airline and they will be the participants in any new airline that might emerge due to the closing of OA. So there must be a channel of communication and understanding between the management and the pilots.

4. Lutfi the reason that OA is the carrier of the ministers and politicians is the last one and of the smallest importance.

5. Iakove BA, LH & IB were all nominees for the acquiring of the company during the recent period. And I think this is the basic reason why they attacked OA and government practices.

Hoping for a solution in 2005
& stuck in awful Barking - East London
Regards
Vasilis.


User currently offlineIcarus75 From France, joined Oct 2003, 812 posts, RR: 0
Reply 18, posted (10 years 1 week 4 days 23 hours ago) and read 2146 times:

Do not forget that OA is the only airlink between some greek remote (and not remote) islands and Athens!!!
If OA is shut down, wich airline will fill the gap? These little links are not always, if ever, profitable but they have to exists!!!
It's easy for someone living in Milan, Madrid, London or Francfort to attack on state aids to OA. Would these same people do the smae if they were living in Karpathos or even Mykonos?



Flying is amazing!
User currently offlineIakobos From Belgium, joined Aug 2003, 3316 posts, RR: 34
Reply 19, posted (10 years 1 week 4 days 21 hours ago) and read 1679 times:

Vassili,

I have been following the OA since I set foot in this country and I do not remember having seen the likes of BA, LH and IB showing an interest in OA.
I do not see where the "dishonesty" would lie.

AFAIR, the only airline that has showed some level of interest is Cronus-Aegean, the rest being capital groups together with foreign-based Greeks.

Of course the domestic network (apart from the few major connections) is something different as it is an absolute necessity to provide air links between the islands and the mainland. I do not see how such operations would be viable without a serious level of subsidies, but I am quite sure the EU would not find an issue in this.


User currently offlineLufthansa From Christmas Island, joined May 1999, 3224 posts, RR: 10
Reply 20, posted (10 years 1 week 4 days 14 hours ago) and read 1595 times:

SXFAN

I, nor does any body else think the southerners are stupid.... I do however think they bow into curruption and political backdoor deals all too often, and, they've been forgiven all to often.

Its not really all that bad of a thing because it works there and this is the way things have been done for thousands of years, however, the EU is quick to forgive this sort of thing when greece or italy does it.

The problem is, tell that to people in Holland. Tell that to ppl in Germany, tell that to people in Denmark etc.... who have their hands tied behind there back and aren't allowed to do similar things in their own countries.
Thanks to the Eurozone, Germany wasn't allowed to help its own people out a short time ago during heavy flooding because it would have sent their budget over the prescribed limits by the Central bank.... yet.... greece gets forgiven for its excessive bill on the Olympics and italians get alway with there little stunt on Alitalia.

Germany more than anything right now, needs to cut its interest rates so it can boost its economy and get jobs flowing again... plus it needs to make some fiscal policy reforms. Right now... it can't do that because thanks to the EU and the eurozone, it doesn't have the power. So.... don't you think people in northern europe, who are suffering high unemployement and have to sit back and watch their companies fail, or their jobs go to Eastern europe...don't you think they're gonna resent the fact that Alitalia and Olympic get away scott free while they pay the price? These have traditionally been very well run economies, with high living standards and relatively high levels of productivity, and at the moment they're stalling, stagent or in some areas even outright failing.

I'm telling you guys... if you don't wanna see far right like people (not nazi's but not that far from them) getting voted into power in northern europe, these stunts at the likes of Alitalia and Olympic MUST STOP. If you don't belive me, the process has already started. Recent political events in Denmark and Holland are a tribute to this.

Finally, you're right... its a cultural union too which is part of the problem. There is no common european Ethos, and typically, the way people live in Scottland or Sweden is quite different from the way somebody lives in Greece or Sicily. This is the very point I'm making.... this issue has to be addressed because it is this "cultural" issue that is a value based thing that is causing the conflict. Whereas somebody in greece may feel that whats going on at Olympic is " the done thing" somebody in Holland probably doesn't. And when they see things close down in their own country, how do you think they feel when the next thing they here is that Alitalia just got away with breaking the rules? Think about it.... its got nothing to do with "who's stupid" and everything to do with a cutlure clash.


User currently offlineBoo25 From United Kingdom, joined Dec 2003, 294 posts, RR: 0
Reply 21, posted (10 years 1 week 4 days 14 hours ago) and read 1580 times:

QUOTE Western A318
"That's my point. Olympic as a viable airline needs to be killed off, brought to the brink or dismantled by a tyrant. That way, if there is anything left, a real team can rebuild from the ruins. If it's killed off, one more loser airline off the world's air routes"

...and is this what the rest of the world should be thinking about all the US airlines who are billions of $s in debt in -protracted- receivership?

If they were to be thought of as 'loser airlines' and 'killed off ' , you'd hardly have any airline network left...

take a look in your own backyard first  Insane before writing like this..


User currently offlineMonkeyboi From United Kingdom, joined Oct 2004, 457 posts, RR: 3
Reply 22, posted (10 years 1 week 2 days 18 hours ago) and read 1425 times:

In all fairness BOO, the US government has never signed any treaties or deals regarding subsidies and US carriers. The Greek and Italian governments however HAVE. And both have already broke the rules (and got away with it) once before.

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