The Greek government has transferred control of ailing Olympic Airlines to Marfin Investment Group in a bid to restore the flag carrier to its glory days under founder Aristotle Onassis.
Athens-based Marfin has paid €177.2m for Olympic, despite a bid of double the value from Aegean Airlines, a private Greek airline, which was ruled out on competition grounds.“This is a one-off opportunity to rebuild a famous brand,” said a Marfin spokesman. “We’re taking over Olympic without debts or liabilities.”
The European Commission has given the go-ahead for the deal, which aims to end years of bitter disputes over alleged illegal aid payments by successive Greek governments to shore up Olympic.
Marfin Investment Group is led by Greek entrepreneur Andreas Vgenopoulos. It has investments ranging from coastal shipping and tourism, to healthcare and real estate, spanning several countries in southeast Europe. Dubai Group, the Gulf state’s investment arm, holds a 17 per stake in Marfin.
The European Commission last year paved the way for Olympic’s privatisation by writing off over €2.6bn in accumulated debt of the perennially loss-making airline, which was losing €2m a day in the fourth quarter last year. It also suspended court action over the repayment of €850m in state aid.
As part of the agreement, the EU has ruled that Olympic must cut its network by 35 per cent to allow increased competition.
The majority of Olympic’s 4,500-strong workforce are expected to retain their jobs. The government will pay compensation or offer jobs elsewhere in the public sector to employees made redundant. Vgenopoulos has head-hunted three senior Aegean executives to run Olympic’s flight operations, ground-handling and technical base.
Marfin will take over Olympic’s day-to-day operations from 1 April, the official start of the summer tourist season, before officially taking over ownership of the airline in October.
The new managers face a major challenge turning around one of the Europe’s worst-performing airlines amid a global downturn. Tourist arrivals, Olympic’s main revenue source, are projected to fall this year by 15-20 per cent.
Mr Vgenopoulos has not disclosed Marfin’s strategy to turn round the ailing airline. According to the Financial Times, however, Olympic could offer high-end services on some European routes - echoing the 1960s when Onassis ran Olympic as his private airline, complete with a French chef on board.