Greece is hoping a restructured Olympic Airways will prove more appealing to prospective investors after revealing plans to streamline the airline company in a bid to revive the flagging privatisation.

Finance minister Nikolaos Christodoulakas and transport minister Christos Verelis yesterday said that the Greek cabinet had approved a plan to restructure the Athens-based carrier.

Under the restructuring plan, a single airline company will be established to concentrate on core and profitable routes. Other non-core activities such as ground handling, maintenance and catering will be spun off and sold separately. It is expected that around 2,000 jobs will be shed as part of the restructuring. According to Olympic's website, the group employs 9,000 staff.

The restructuring is designed to make the airline itself more attractive to investors. Despite entering exclusive negotiations with two consortia, Axon Airlines and Integrated Airline Solutions, Greece has so far been unable to find investors for the company as part of a privatisation effort launched in December 2000. It is hoped that by reducing the scope of the investment required, the necessary funding to secure the future of the revamped airline can by found.

Credit Suisse First Boston will continue to act as adviser to the Greek state on the deal and will now seek an investor for the slimmed down airline company. In parallel to this, efforts will be made to find investors for the other elements of the business. Greece is seeking an investment of €100-€150 million ($88-$131 million) in the new company. Again a majority of the company will be on offer, having offered to sell between 51-65% in the carrier during the current privatisation effort.

Source: Flight Daily News