mozart
Posts: 2047
Joined: Thu Aug 14, 2003 12:21 am

Olympic - Why So Unsuccesful?

Tue Feb 08, 2005 11:53 pm

On a recent trip to Greece I started thinking about Olympic Airlines. Here's my image of it, but it would be great if members of this forum could validate/falsify it and fill in the holes:

- Founded by Onassis, then appropriated by the government in the 1970s
- Greek's "flag carrier"
- Traditionally a global player, with flights to North America, Australia and South Africa in the past. Australia is still mentioned on the webpage, but I seem to remember that OA doesn't fly there anymore, and also I don't see any other aiport on OA's route map that could be used as an intermediate stop (don't tell my they go non-stop with their A343s, right?). JNB I am not sure, thought they had stopped that, too
- In bad economic shape since many years. BA's consulting arm tried turning it around, but did not fully succeed (by how much though?)
- Fleet consisting of B734s and A340s, with 717s, ATRs and DH8/DH1s in a regional sub.

I have the following questions:
- Is OA burdened by some sort of public duty to fly to many of the islands even if it's not economical?
- What's the status of the subsidiary? Is it wholly owned by OA?
- And my most important question: why can't an airline like OA be successful? They have a decent captive market, a name - what are they doiing wrong? Or are A3 and Hellas making their life difficult?

Thanks for any input.
 
alitis
Posts: 233
Joined: Wed Apr 19, 2000 11:20 pm

RE: Olympic - Why So Unsuccesful?

Wed Feb 09, 2005 2:28 am

They also flew to Tokyo in the late 80's or early 90's for a while. As for JNB, at one point, the A300-605R's were assigned that route with a technical stop in Nairobi. Now they are flown non-stop with A340-300. 717's are on the way out. Sydney is via codeshare with Gulf Air.

Hope this answers some of your questions.

-Alitis
 
GuyBetsy1
Posts: 808
Joined: Thu Aug 16, 2001 4:00 am

RE: Olympic - Why So Unsuccesful?

Wed Feb 09, 2005 3:07 am

UNIONS. An old world mentality. To name a few.
 
odafz
Posts: 269
Joined: Thu Jul 15, 2004 8:00 pm

RE: Olympic - Why So Unsuccesful?

Wed Feb 09, 2005 5:54 am

Cher Mozart,

Glad to see you again, here some historical facts about OA. It was formed to succeed TAE (Technical and Aeronautical Exploitations Co) , a bankrupt state company. The assets were acquired by Onasis and a guarantee to operate as the sole Greek carrier. This right was relinquished at the end of 1974 and the company was bought by the Hellenic state paying then (I think), the hefty sun of 50 Mio USD. At that time, the company was in the red, following the "choc petrolier" of the seventies.
The company was the country's sole carrier until it was forced by the EU to open its domestic market to competition : Cronus Airlines, Aegean Airlines. Air Greece and Cretan Airlines, Venus AIr were few airlines that sprung from this deregulation. Today only Aegean Airlines survive as it is the merger between Cronus, Aegean Airlines and Air Greece.
Australia is being served on a daily basis thanks to a code share with GF : ATH-BAH-MEL and JNB non-stop with their A340.

Concerning your first question , The lines that Olympic aviation ( wholly owned subsidiary of OA) operates to remote island constitute a vital link fir these small islands. Of course these services are not profitable and are subsidized by the Greek government in complete accordance with Bruxelles since it provides vital air link to remote parts of the country, inasmuch WIDEROE provides the smae kind of services in Northern Norway (and are subsidized also by the Norwegian government). The only condition required by the EU is to have bids to operate these lines.

I will answer in French , cheer Mozart, concerning your third question : "Clientelisme politique" I am sure you are going to understand the woes of OA by these little 2 words.

As a foreigner living in Greece, I can say that you can't dissociate politics from Olympic Airways , plus a very active role played by the unions to safeguard their vested rights.

But, on the other hand, is the lack of let us strategic planning that has cost OA a lot . For example, Greece is situated at the crossroads of the Middle East, Europe, the Balkans. Wouldn't be a strategic move , to make Athens a hub for flights between eastern and northern Europe to the Middle East, the ex soviet republics of Georgia, Armenia , kazakstan etc.... Austrian was instrumental in playing that strategy and has become an active player in traffic flow between the East and West .

The collapse of Beirut has a hub following the civil war in the mid seventies should have been a golden opportunity for OA to take the role of MEA. OA had the traffic rights etc...

A difficulty in seeing opportunities (please see the above 2 points), for expansion, OA inaugurated lines to Scandinavia and to Spain at the end of the eighties , before that IB and SK were enjoying full monopolistic position on these routes and the Greek government was granting 5th freedom rights to such companies as Syrian Air on their weekly service DAM-ATH-SXF-CPH and Iraqi AIRWAYS on BGW-ATH-MAD, and Alia on AMM-ATH-MAD.

In short, OA could have been the most important player in this region of the world and alliances would have courted the airline, unfortunately political interference, poor planning have led this company into nearly bankruptcy.

Let us not forget that in-flight services , seat pitch are better than their European counterpart and it is also a pity that it can not capitalize on it. Yes, I know everybody have horror stories on OA crews but also uplifting stories with this airline , I have had both experiences.
 
mozart
Posts: 2047
Joined: Thu Aug 14, 2003 12:21 am

RE: Olympic - Why So Unsuccesful?

Wed Feb 09, 2005 7:37 am

ODAFZ,

I knew I could count on you.  Smile/happy/getting dizzy Thanks a lot, very informative and insightful. Welcome on my respected user list. By the way, congrats for your French... you say you are a foreigner living in Greece... from your name I cannot tell... what is your "home country"?

You basically confirm my gut feeling: there should be a potential for OA, and the "capacity potential" ( Big grin you know what I mean) of the new ATH airport could support any strategy to play a pivotal role. You mention BEY and MEA, and indeed we can see how even little MEA (9 planes) starts playing a role in a network - it will join Skyteam as an associate member (or whatever the exact term is) - backed by the development of a well functioning, new airport.

Are you aware of what OA's strategy is for the future? Do they focus on linking Greece to the rest of the world, or is a "pivotal role" like that of OS that you mentioned, or of EK or QR in the cards? Habe OA's past woes wiped away all the potential to develop something grander, or can they still do it? Why not have OA as a member of Skyteam or Star Alliance, OA could play a role as serving some of the CIS republics and have a niche in the Near and Middle East, including sparsely-served destinations like Aleppo or Alexandria. plus of course. ther existing fdestinations. Just a thought
 
odafz
Posts: 269
Joined: Thu Jul 15, 2004 8:00 pm

RE: Olympic - Why So Unsuccesful?

Wed Feb 09, 2005 7:03 pm

Cher Mozart,

After a rocky start, I am happy we can exchange ideas and thank you of making me a respected user (you are the first) and I am reciprocating it.

Now, as painful as it is, I think OA has lost golden opportunities because of the state interference and political lobbying etc... those lost opportunities were:
1-Not to take the role of BEY after the collapse of the country in the seventies.
2-Not to take advantage of the break-up of soviet union and the "debalkanization" of the region in the early nineties.

Picture this : the 1979 summer timetable of Olympic airways with flights to :
AMM-DAM-BGW-KWI-JED-RUH-DHA-BAH-DOH-AUH-DXB-CAI-TLV, connecting to :ORY-LHR-LIN-FCO-ZRH-GVA-MUC-DUS-FRA-BRU-AMS-JFK-YUL+ australia services (BKK-MEL-SYD). I did not include BEY on purpose because of the precarious political situation at this time.

in 1997, the ideal timetable of OA would have included in addition to the above ,flights to : BUD-BEG-SKP-TIA-SVO-WAW-PRG-BUH-SOF-KBP, and flights to : ALP (Syrian air is building capacity at this airport), BEY, BAK, TBS, EVN, TAS (the twice weekly flights of Uzbekistan AW to TAS has a lot of connceting pax from TLV , 60-70 passengers on average!!!!), ALA .

As you can see, none of it was materialized despite huge potential. Can they build a hub, frankly I am pessimistic about it as it will cost a lot and needs a serious revamping of the strategy and corporate and public image (which is quite negative for the time being despite has some assets it can capitalize on) and time the most important factor is not their best ally for the time being

Why on earth should Sky Team or Star alliance being interested in OA. The company has nothing special to offer, Is it the ATH-DXB-KWI-ATH or ATH-KWI-DXB-ATH flight (horrendous routing if I may say) that we will provide connecting traffic to a star alliance or sky team airline member and the domestic traffic is largely O & D.

On the other hand, MEA has the potential and the know how.As you probably know , MEA was instrumental in developping BEY as a hub in the Middle East + good service and reliable operations.

OA is in need of a serious restructuring on all levels and of a Leader a la Gordon bethune , the past years were horrendous to OA as CEOs were lasting 12 to 16 months on average as you can guess it is not sufficient to breath life into that company nor to device any plans for the future.

As for my origin, I will give you a hint which country is registering its Aircraft with OD ?

have a nice day

 
Beaucaire
Posts: 3888
Joined: Sun Sep 14, 2003 4:48 am

RE: Olympic - Why So Unsuccesful?

Wed Feb 09, 2005 7:57 pm

Al salam Alaikum ODAFZ...
The best kitchen in the world is not french but lebanese !
So when it comes to OA they should have done like SN Brussels and scale back for a complete new beginning.Glorious dreams of large national airlines are over and the hospitality of the greek could become a great business-instrument.
I think the new OA should have not more than 25-30 aircraft to start with,not more than three models (1 regional /island hopping ,1 for short and 1 for long distance )
Focus on historical european destinations with large greek populations and big business potential(also Balkans ),some US ,Middle East and consider China.
Forget Africa,Australia (EK will eat you alive )or South America but create a strong corporate identity on service ,real food !! and friendly staff - there are many passengers who appreciate service and don't always search for no-frill flights.
Please respect animals - don't eat them...
 
mozart
Posts: 2047
Joined: Thu Aug 14, 2003 12:21 am

RE: Olympic - Why So Unsuccesful?

Wed Feb 09, 2005 8:09 pm

which country is registering its Aircraft with OD ?

Yallah, that is easy!!!  Smile/happy/getting dizzy Just didn't guess it from your name (a bit more when I turn first name and family name around, I just "misread" them, but some of your remarks start making sense (those around BEY). Well, see you there maybe one day.
 
ozglobal
Posts: 2536
Joined: Tue Nov 09, 2004 7:33 am

RE: Olympic - Why So Unsuccesful?

Wed Feb 09, 2005 8:26 pm

I fly to MEL generally twice a year and there is usually a OA A340 parked there. People may not be aware that MEL is the SECOND GREEK CITY OF THE WORLD after Athens, with 0,5 million.

Ozglobal
When all's said and done, there'll be more said than done.
 
Beaucaire
Posts: 3888
Joined: Sun Sep 14, 2003 4:48 am

RE: Olympic - Why So Unsuccesful?

Wed Feb 09, 2005 8:37 pm

And what do you make out of Thessaloniki ??
I thought they are the second greek city in terms of habitants ?
Please respect animals - don't eat them...
 
ozglobal
Posts: 2536
Joined: Tue Nov 09, 2004 7:33 am

RE: Olympic - Why So Unsuccesful?

Wed Feb 09, 2005 8:43 pm

Beaucaire,

In Greece, they are second city. I said Greek (ethnic) city in the world. Think Italians and Jews in NY for example.... Melbourne Greeks often make this point.
When all's said and done, there'll be more said than done.
 
ozglobal
Posts: 2536
Joined: Tue Nov 09, 2004 7:33 am

RE: Olympic - Why So Unsuccesful?

Wed Feb 09, 2005 8:49 pm


At 500,000 Greeks, MEL is number two after Athens...

Principal Cities
Name Adm. C C 2001-03-18 f
1 Athínai ATT 745,514
2 Thessaloníki MAK 363,987
3 Piraiévs ATT 175,697
4 Pátrai PEL 161,114
5 Peristérion ATT 137,918
6 Iráklion KRI 133,012
7 Lárisa THE 124,786
8 Kallithéa ATT 109,609
9 Níkaia ATT 93,086
10 Kalamariá MAK 87,255
When all's said and done, there'll be more said than done.
 
cragley
Posts: 391
Joined: Tue Jul 20, 2004 6:09 pm

RE: Olympic - Why So Unsuccesful?

Wed Feb 09, 2005 9:35 pm


When OA stopped services to Melbourne a few years back, the local greek community was dissapointed to say the least. They were very vocal in their opinion and many switched to fly either SQ or TG as they were both 1 stop options to Athens.

I know that both SQ and TG offer very good VFR rates.

 
Beaucaire
Posts: 3888
Joined: Sun Sep 14, 2003 4:48 am

RE: Olympic - Why So Unsuccesful?

Wed Feb 09, 2005 9:47 pm

@OzGlobal - thanks for the figures- I learned something...
Please respect animals - don't eat them...
 
odafz
Posts: 269
Joined: Thu Jul 15, 2004 8:00 pm

RE: Olympic - Why So Unsuccesful?

Wed Feb 09, 2005 11:55 pm

Cher Beaucaire,

Thank you for your kind words on Lebanese kitchen, greek kitchen is not bad either and certianly not the french one.

The liquidation of SABENA was one of the boldest move made by any government (after the firing of air controllers during the Reagan era). SABENA was a money pit and never made a dime for the Belgium Governement (except for one year).

Apparently, the Greek government does not want to resort to that drastic measure because of all the political cost involved ( and the financial ones), but the company is draining a lot of money.

Just a clarification though, the glorious days of large national airlines are not entirely gone, CSA, MALEV (airlines comparable to OA), MEA, Tunis Air, are doing rather well in a very competitive environment, the days where Airlines were maintaining "des lignes de prestige", and the best illustrated example is when MEA opened BEY-TUN for prestige reason because the Arab League HQ moved to Tunis from CAI .

OA has some competive advantages on most european carriers (please read this thread) and should capitalize on it. It should cater to the Greek diaspora : New York, Chicago, Montreal, JNB, to the Middle East where there is a lot of economic, historical and religious ties (AMM-CAi-ALY-DAM-BEY). There is too much competition to Australasia and the far East from Athens, already the following airlines offer immeadiate connections to Australia and the Far East :
TG through BKK
SQ through SIN
EK through DXB
GF code share with OA on its daily ATH-BAH-MEL,
QR will follow soon on June 15

As far as fleet is concerned, I think for the moment they have the right mix :
ATR42-ATR 72-Dash8-100 to operate inter island and thin domestic routes, they should rationalize in operating one type of plane , in this case the Dash 8 will be my choice (the Dash8-400 fits very well)

The A340 should remain to serve JNB and the Americas.

A mix of A318/A319/320/321 for its european and middle eastern network, or B737-600, B737-700, B737-800 .

Thank you for reading me



 
iakobos
Posts: 3255
Joined: Wed Aug 06, 2003 6:22 pm

RE: Olympic - Why So Unsuccesful?

Thu Feb 10, 2005 12:50 am

Time to introduce my 0.02 cents...since I am somehow related to all parties, Greece, OA, Athens, Sabena, SN Brussels,.....went to and through BEY many times, flew MEA (with pleasure) many times,....and even French cuisine.

Couple of starters

For Beaucoeur(caire)
The best kitchen in the world is not french but lebanese !
This is true clientelisme gastronomique.

For OzGlobal
These are not cities, but municipalities.
1, 5 and 8 are all part of Athens; 3 and 9 are both Piraeus; 2 and 10 are both Thessaloniki.
The last census found Ath + Piraeus (there is no separation) at a little over 4 million, Thessaloniki around 650,000. But yes, MEL is a big Greek city.

ODFAZ is well informed, nothing to add. I totally concur with the potentiality that ATH (and consequently OA) had, especially at the end of the 80's and the following half a dozen of years. In this respect, OA and ATH are perfectly in line with the aspirations of the Greek State itself, they dreamed of becoming the economic platform of the region. They did make great plans, only to discover that the only thing that was correct was their geographical location.
The rest remained for a time dream, now a nightmare.

Mozart, indeed there is more than one parallel to draw between OA and Sabena, both started as global players in the golden era, both engulfed thousands of happy but little productive staff with flowering salaries and job for life protection, both gave in to party backed unions, and we can find a few more,... until the mid-seventies.

Sabena had some honest tries but they were too modest in scope to change the path of history.
OA had no tries, the populist policies of Andreas Papandreou made sure he had a solid grip on the country through the votes of the army of civil and pseudo-civil servants.




 
art
Posts: 2697
Joined: Tue Feb 08, 2005 11:46 am

RE: Olympic - Why So Unsuccesful?

Thu Feb 10, 2005 3:55 am

I don't know all the facts about Olympic but just an idea for what it's worth.

From what I have read, the national airline has returned a loss for every one of the last 30 years with 1 exception. With such a record, the business must have massive structural problems - management incompetence, staff culture etc That is a considerable drain on government finances. Why carry on financing a failure set to carry on failing ad nauseam? Better to get a different business to handle the provision of airline seats.

Government should start planning for a post Olympic era.

Assuming that an infrastructure to provide air links to islands is needed, these routes could be hived off and put out to tender with uneconomic routes being supported on a contract basis by the government.

Government could then invite tenders for the assets of the company. These assets could be transferred to a new carrier in stages in an attempt to reduce disruption during the handover.

Fate of the management? Who cares - sounds like they didn't. Fate of the staff? If they are good, many should be able to work for the new carrier. If not, redundancy looms.

The cost? Including generous redundancy payments for staff, it's got to be cheaper than supporting a consistent loser long term. Plus government gets taxes from a profitable airline. Plus successful airlines grow. Growth = more jobs.
 
mozart
Posts: 2047
Joined: Thu Aug 14, 2003 12:21 am

RE: Olympic - Why So Unsuccesful?

Thu Feb 10, 2005 4:35 am

Art, sounds all very well, but can you think of any continental European government to have enough guts to execute such a plan? Nothing wrong with the plan, but just that they won't do it...
 
art
Posts: 2697
Joined: Tue Feb 08, 2005 11:46 am

RE: Olympic - Why So Unsuccesful?

Thu Feb 10, 2005 4:57 am

There will come a time when the Greek government will be forced to cut off finance due to EU competition legislation. Also the incoming government discovered Greece had much larger financial problems than the previous administration owned up to. The government needs to reduce spending / raise revenues. A national carrier which is guaranteed to need hundreds of millions of euros a year (I guess) simply to stay alive is very inconvenient when finances are tight.
 
eilennaei
Posts: 1003
Joined: Tue Nov 23, 2004 8:41 am

RE: Olympic - Why So Unsuccesful?

Thu Feb 10, 2005 5:07 am

With some relief I may add here that Finnair is not a continental European airline. Employers have had enough sense this far to have realised that even a lower pay is better than no pay, and that some temp vacansies could not been filled up permanently for the few lean years from '01. The cost-cut program equalled to a 3.0 % reduction in payroll costs in 2004, while the number of people flown increased at the same time by 6.6%. The last Quarter of 2004 was on the black, so by all accounts there should be at least one majority tax-payer-owned air traffic company operating in the world in the future as well. More to be announced on Feb 17th for the whole fiscal year.

regards
Eilennaei

Popular Searches On Airliners.net

Top Photos of Last:   24 Hours  •  48 Hours  •  7 Days  •  30 Days  •  180 Days  •  365 Days  •  All Time

Military Aircraft Every type from fighters to helicopters from air forces around the globe

Classic Airliners Props and jets from the good old days

Flight Decks Views from inside the cockpit

Aircraft Cabins Passenger cabin shots showing seat arrangements as well as cargo aircraft interior

Cargo Aircraft Pictures of great freighter aircraft

Government Aircraft Aircraft flying government officials

Helicopters Our large helicopter section. Both military and civil versions

Blimps / Airships Everything from the Goodyear blimp to the Zeppelin

Night Photos Beautiful shots taken while the sun is below the horizon

Accidents Accident, incident and crash related photos

Air to Air Photos taken by airborne photographers of airborne aircraft

Special Paint Schemes Aircraft painted in beautiful and original liveries

Airport Overviews Airport overviews from the air or ground

Tails and Winglets Tail and Winglet closeups with beautiful airline logos