Iberia Airlines, Qatar Airways among bidders for debt-ridden Olympic Airlines

Wednesday, November 5, 2008, 7:55 by Aviation Correspondent

Qatar Airways, the flag-carrier airline of Qatar, based in Doha, and Iberia Airlines, the flag carrier of Spain, are among over one dozen investors which have expressed a preliminary interest in buying the ailing Olympic Airlines, the  national carrier of Greece.

The Greek state television NET said, citing sources in the Greek Ministry of Transport, that at least 18 candidates, including airlines and private funds have tabled non-binding declarations of interest in the first phase of an international tender that ended on October 31, 2008.

Costis Hatzidakis, Greece’s Minister for Transport, told reporters: “The Greek government is satisfied with the investor line-up. Of course, there is satisfaction. Never in the past, in any process to privatise Olympic Airlines, had there been such a preliminary interest.”

The Greek government, the minister added, would study the offers and release the list of candidate list in the coming days.

The Greek government plans to liquidate Olympic Airlines, to discard most of its estimated 850 million euros ($1.1 billion) in accumulated losses and offer jobs or assistance to any of the 8,100 current employees who would not be hired by the successor company.

Olympic Airlines, based in Athens, the capital of Greece, operates services to 35 domestic destinations and to 40 destinations worldwide. Its main base is Athens International Airport, with hubs at Thessaloniki International Airport and Rhodes International Airport. Olympic Airlines has been accredited by the International Air Transport Association (IATA), the international industry trade group of airlines headquartered in Montreal, Quebec, Canada, with the IOSA (IATA Operational Safety Audit) for its safety practices.

Greece wants to sell the troubled Olympic Airlines by the end of 2008, and the bids and selection process will be surveyed by a third-party proxy.

The sale of Olympic Airlines involves three separate parts of the company – airline services, ground handling, and technical maintenance.

The investor/investors chosen will be obliged to keep the name Olympic, the logo and the existing flight slots, the Greek government has said.

According to reports, successive governments of Greece have been, for years, seeking private investors to take over the debt-ridden Olympic Airlines, but the process was complicated by the European Commission’s demand that the company should repay the “illegal” state aid it received. In September 2008, the European Commission gave the go-ahead for Greece’s plans to privatise Olympic Airlines, but on condition that the “850 million euros ($1 billion) of illegal state aid must be returned.”

Olympic Airlines has offered retirement packages and state jobs elsewhere to many of its employees. However, the Greek federation of civil aviation unions (OSPA) sternly opposes the move to privatise the carrier.