The spawning of domestic start-ups in the Greek market following the introduction of deregulation is increasing the pressure on troubled flag carrier Olympic Airways.

The European Commission's agreement giving Olympic exclusive rights to serve the Greek islands ended last year and a group of eager start-ups immediately started flying.

One of them is Aegean Aviation of Athens. Aegean has ordered three British Aerospace RJ100s with one option to launch services from its Athens hub in June, with flights to Thessaloniki, Rhodes, Heraklion and Chania. "We are looking forward to introducing the all-new Avro RJ100 and being the sole independent airline in Greece with brand new jet equipment," said Theodores Vassilakis, president and chief executive of Aegean's parent company, the Vassilakis Group. New shareholders from the shipping and banking sectors should increase the airline's capital to $35 million.

Meanhile, Greek travel group Manos launched a domestic airline, Air Manos in April using two leased Avro RJ100s and one Shorts 360, investing $13.6 million in the airline.

Athens-based Axon Airlines plans to begin flights within Europe this summer using two new Boeing 737-700s. Regional carrier, Air Greece, meanwhile, is leasing two Fokker jets for routes between Crete, Rhodes and the Greek mainland. And established Greek operator Cronus Airlines plans to introduce seven new Greek destinations this year.

The flurry of start-up activity can only add to Olympic's worries. The carrier has postponed the delivery of eight Boeing 737-800s. And a decision on a winning bidder to assist in managing the airline was due on 20 March, yet none had materialised.

"We ourselves don't know what is going on. It's in the hands of the Greek government," despairs one Olympic source.

Source: Airline Business