The European Commission has ordered struggling Olympic Airways to return €850m in state aid to the Greek government as part of a package it has authorised to privatise the struggling national carrier.

The plan includes closing the existing debt-ridden company, with parallel procedures to start and transfer assets to a new company managed by private investors.The new holding company, called Pantheon, will be allowed to continue using Olympic’s name and famous five-ring logo. It will also acquire 65% of its capacity, including its landing slots. Two other new companies will acquire ground-handling and maintenance assets.
The deal ends 15 years of legal wrangling between the EC and successive Greek governments which propped up the perennially loss-making airline with huge subsidies and aid packages to keep it afloat and buy off union resistance to restructuring.
EU Transport Commissioner, Antonio Tajani, said that the deal demonstrated good cooperation between the Greek authorities and the European Commission, and would be beneficial to Greece, competition and passengers.
Tajani expressed conviction that a new market in the air transport sector, without distortions from state aid, can develop in Greece. He said an independent trustee would oversee the sale to ensure EU rules are not violated.
The deal resembles the liquidation of Belgian national carrier Sabena and its re-emergence as Brussels Airlines, and sets an important precedent for European aviation privatisations.
The ruling comes as the consortium planning to buy Alitalia said it would withdraw its offer today if the unions failed to accept its terms.
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