British Airways is targeting Olympic Airways as a possible oneworld partner as part of a strategy aimed at developing the new Athens Spata airport as a major regional hub.
The UK airline, which, through its consultancy arm Speedwing, has a contract to restructure Olympic in preparation for privatisation, is also talking to the Greek government about taking a stake of up to 21.5% in the Greek national carrier - the maximum permitted under the management agreement signed in July.
BA will need the agreement of other oneworld members before a decision on Olympic membership can be made. "It will need to assess its value to the alliance", says an industry source.
One of Olympic's main assets is its privileged access to the new airport at Spata, which will open in early 2001. Spata will have two runways operational around the clock, and is likely to become the largest airport in southern Europe, handling up to 56 million passengers a year against just 11 million at the current airport. It is also likely to become a major freight terminal.
Speedwing executive and Olympic chief executive officer Rod Lynch says that BA's interest is to "repair the airline and develop our activities in the area". He adds that Spata has been identified as an "important traffic generator in the next decade. It's a piece of the jigsaw which would open up a 1,000-mile [1,600km] catchment area in the southern CIS, the Balkans, near and middle east".
The Greek Government has said officially that it is ready to sell 49% of the airline, although indications are that it may be preparing to raise that figure beyond 50% - a move which would depend on agreement with the airline's unions. At present the workforce is slated to take 6% and Greek institutions the remaining 43%.
A 25% chunk of Olympic's catering arm was recently offered on the Greek stock exchange and was oversubscribed by 100 times. "There's a real appetite for the equity market at the moment", says Lynch. BA has no interest in a majority stake in the carrier since it would remove the airline's long-haul traffic rights. It may, however, look for a future increase in its stake to give it better voting rights on the board.
Since local deregulation took effect in January, competition from airlines such as Aegean Aviation has increased. Lynch says that Aegeans' effect has been to increase market size, although he admits that "they took a bite out of us". Aegean, merged with Air Greece, has "rewrittten the map", he says, adding that there will be "obvious synergies" at the new Spata hub between Olympic's medium and long-haul operations and Aegean's domestic and short-haul routes.
Source: Flight International