Management at Greek carrier Olympic Air believe focusing on core markets is key as it attempts to build a profitable operation after years of losses incurred by its predecessors.
The new carrier, which is backed by Greek investment group Marfin, emerged from the privatisation of Olympic Airlines and launched services in late September. "It is a completely new company. The only thing that connects it to the old is its right to use the brand," said chief executive Antonis Simigdalas, during a recent European Aviation Club event in Brussels.
The new carrier, established under the gaze of the European Commission, was restricted to starting operations with no more than 65% of the former Olympic's capacity. Rather than cut across the board, Olympic Air has opted to drop specific areas covered by its predecessor. As a result long-haul operations and some other markets, like Germany where Star Alliance carrier Aegean Airlines and Lufthansa are strong, have been left out. "Olympic Airways was, in the past, an operator of everything from a flight school to long-haul air transport. The new Olympic had to avoid those mistakes," says Simigdalas.
He does not expect any rapid expansion and says growth hinges on its commercial performance. "This is a new company with a new shareholder and is privately funded and, in the end, we are talking bottom line," he says. "For us to propose to our owner any further development we would have to show some results first. We are showing some good early results with traffic but we have only been operating two months. Until we have more solid ground under our feet we are not able to discuss expansion."
Simigdalas is also cautious about predicting when it might reach profit, but suggests break-even could come in 2011 if things go well it. "We have to be careful with such predictions, as you never know," he says. "With this project we may have our heads in the air, but we've got our feet on the ground."