Olympic Airways, the Greek national carrier is heading for privatization, and Cyprus Airways intends getting in on the act.
The Cypriot airline reportedly does not intend buying its Greek counterpart outright, but according to the Sunday edition of the Cyprus Mail, holding a portion of the Greek airline fit into its general plan for expansion. The strategy of the Cyprus Airways, said a source at the company, would be to purchase the Olympic shares as part of a consortium.
The Greek government launched the tender process to sell a majority stake in Olympic Airways on December 8. Reportedly, it aims to sell at least 51 percent of the airline’s stock, and to hand over management control to the new owners, which could comprise local and international investors, or a foreign airline.
The Greek airline has been on the block for quite a while. Earlier this year, British Airways turned down an option to acquire a 20 percent stake in the Greek carrier, and as a result the Greek government had terminated its contract with Speedwing, a BA-owned consultancy, which had been hired to prepare the company for privatization. The Greek government then hired Credit Suisse First Boston for the job.
Olympic Airways, which currently is in debt to the tune of about $96.7 million, has only once made a profit in the past two decades. European Union rules prevent the Greek government from recapitalizing the company. – (Albawaba-MEBG)