- Title: GREECE: New owner of Olympic Airlines says carrier will be profitable
- Date: 31st March 2009
- Summary: ATHENS, GREECE (MARCH 30 2009) (REUTERS} (SOUNDBITE) (English) MARFIN INVESTMENT GROUP VICE CHAIRMAN ANDREAS VGENOPOULOS, SAYING "Year two we will start having some very considerable profits, this is what we plan for, after all what we are doing right now is to end up with an airline which will be extremely competitive."
- Embargoed: 15th April 2009 13:00
- Location: Greece
- Country: Greece
- Topics: Finance,Transport
- Reuters ID: LVA248N26HBPFP5YIWCQROKBH9MA
- Story Text: Marfin Investment Group's (MIG) Vice Chairman Andreas Vgenopoulos said on Monday (March 30) buying Greece's loss making state airline in the middle of a financial crisis was not a problem but an opportunity.
Vgenopoulos said he could not imagine Greece without Olympic Airlines, one of the main carriers for tourists to the Greek islands, but for years struggling under mismanagment and debt.
The government had been trying for years to sell it without success.
When an international tender failed in January, the Greek government appealed to local businessmen and MIG stepped in to buy the airline, at a modest price and free of the debt that was costing the country some one million euros a day.
"It is very important for Greek tourism and the Greek economy overall to still have Olympic to fly, to satisfy its passengers and to satisfy the needs of tourism and the economy. And I might say its also important for the Greek society during this period of crisis to see that such an important brand name can be of use to somebody. On the other hand we also believe its also a very good business," he told Reuters in an exclusive interview.
Vgenopoulos said he viewed the global economic downturn as an opportunity for some good deals and could bring some benefits to the venture.
"Crises usually go together with opportunities, as I have said before the Olympic venture for us is a start up business, a start up business in a period of time that planes are cheaper whether you buy them or you lease them, the personnel you can find in abundance, you can find very qualified personnel at very reasonable working terms or packages, and we have the luxury of scheduling our business plan factoring in the crisis," he said.
He said he expects the carrier, at the minimum, to break even in the first year and turn considerable profit by 2011.
"Year 2 we will start having some very considerable profits, this is what we plan for, after all what we are doing right now is to end up with an airline which will be extremely competitive."
MIG bought the loss making airline, its ground handling and aircraft maintenance units for a 177 million euros (233 million U.S. dollars) earlier in March, ending years of wrangling with the European Union over illegal state aid.
Olympic was founded in 1957 by late Greek tycoon Aristotle Onassis, who sold it to the Greek state in 1974. Driven to financial hardship under state hands, it was constantly draining the country's budget. Once a luxury carrier with designer uniforms and gold plated cutlery, it became one of Europe's most troubled airlines in state hands and watched its private rival Aegean Airlines steal more than half of its domestic market share.
MIG, Greece's largest investment holding, fully takes over in October and Vgenopoulos said he wants to dominate the domestic market and be the carrier of choice.
Olympic operates 37 aircraft to about 36 domestic and 33 overseas destinations.
The state has pledged to take over the burden of finding other state jobs or compensating those of the 7,000 employees who will lose their jobs.
Vgenopoulos said MIG has already received some 19,000 resumes.
He would not say how much MIG envisioned to invest in Olympic but the firm is sitting on one billion euros in cash. MIG's main shareholder is Dubai Financial Group.
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