Axon Airlines expects to sign a memorandum of understanding with the Greek Government to acquire a controlling stake in debt-ridden Olympic Airways next month. But Axon says the two sides will need up to three months to reach agreement on details of the purchase, which could include halving the airline's 8,000-strong workforce.

Athens-based Axon was named as preferred bidder for Olympic last month, ahead of Cyprus Airways and Integrated Airline Solutions (IAS) of Australia. Axon then began what it said would be a month of talks on acquiring a 51% share in the national carrier.

Axon president Thomas Liakounakos says two to three months will be needed to try to reach agreement on a range of details - one of the most sensitive being job cuts. "The gap between costs and revenue is too big," says Liakounakos, "and we must minimise costs and increase revenue if Axon is to buy into Olympic."

The Greek Government maintains it wants to hold parallel talks with Cyprus Airways and IAS in case the talks with Axon fail, but the Cypriot national carrier says it is not interested in a bidding contest.

Source: Flight International