OLYMPIC AIRWAYS, S. A.: 96-100 Syngrou Ave., Athens, GR-11741, Greece; Phone 30 (1) 926-9111; Fax 30 (1) 926-7154; http:// Www. olympic-airways. gr; Code OA; Year Founded 1957. Late in 1956, Greek shipping magnate Aristotle Onassis purchases the government-owned airline Technical and Aeronautical Exploitations Company (TAE) for ?700,000 and a guaranteed concession of sole rights to operate all Greek air transport for 50 years. Onassis, the only individual in the world of that day to own a national airline, seeks further assistance.
The government of National Radical Union Prime Minister Constantine Karamanlis also agrees to cover a variety of contingencies, including losses incurred by unauthorized strikes and losses on transatlantic flights. Other concessions granted to the airline include: the right to export profits; the right to import capital goods without customs payments; exemption from corporate taxes and from the payment of landing fees anywhere in Greece; a monopoly on refueling and handling of foreign carriers flying into the country; and, if necessary, interest-free loans of $3.5 million. As a further assistance, the government also bans all Greek carriers from offering transatlantic charters.
On January 1, 1957, the ex-government carrier is reorganized, given its present name, and capitalized by Onassis and his three sisters; UAT French Airlines, S. A. official Francis (“Tom”) Fabre is recruited as managing director. The 14 DC-3s and DC-4 inherited from TAE are given new livery and the Olympic symbol of five circles becomes the company logo.
With Capt. Pavlos loannidis at the controls, a DC-3 inaugurates Olympic’s flight operations on April 6 over the route from Athens to Thessaloniki. Orders are placed for four DC-6Bs, while three are leased from the French carrier UAT French Airlines, S. A. The latter enter service on June 2 on a twice-weekly service from London to Beirut via Paris, Athens, and Nicosia.
The purchased DC-6Bs join the fleet in 1958. A new service is started to Cairo, domestic routes and frequencies are increased, and the company becomes one of the few in the world to operate the Piaggio P-166 gull-wing transport. Flights are introduced to Zurich, Frankfurt, and Tel Aviv.
Managing Director Fabre resigns in June 1959. He is succeeded by Costa Konialidis, a cousin of owner Onassis.
Flight 214, a DC-3 with 3 crew and 15 passengers and en route from Athens to Salonika, crashes into a mountain near Avlon Attiki, Greece, on October 29; there are no survivors.
A consortium agreement is signed with British European Airways Corporation (BEA) on April 1, 1960, providing for joint operation and promotion of traffic on routes from London to the Eastern Mediterranean. Chartered British Comet 4B jetliners inaugurate London-Athens service on May 8. Operations continue apace in 1961-1963 and by 1964 the airline’s employment population stands at 2,245, the fleet has 15 airliners, and these carry a total of 25,071 passengers on the year. In 1965, orders are placed for Boeing 707-384s and 727-294s.
The first 707-384C is delivered on May 11, 1966 and is employed to launch an Athens-New York transatlantic service on June 1. The carrier’s pilots go out on strike on August 15, but the company is able to operate two international and four domestic flights with nonstriking pilots.
Other unions back the strikers, but owner Onassis refuses to talk until the job action is ended. The strike is finally settled on August 30 with a 50% pay increase for the pilots.
Enplanements for the year total 991,713.
The first B-727-284s begin to arrive in early 1967 and are set to work on the European routes. Passenger boardings exceed the million-mark for the first time (1,133,009).
The workforce stands at 4,000 in 1968. The fleet now includes 2 B-707-384Bs, 3 B-707-384Cs, 2 B-727-284s, 5 Comet 4Bs, 6 DC-3s, and 8 DC-6Bs. At least three of the latter type are purchased during the spring from Northeast Airlines. Service to Africa begins in late March with flights to Nairobi and Johannesburg.
In something of a scandal on October 17, Capt. Donald McGregor, a senior company pilot preparing to undertake the regularly scheduled B-707-384B service to Athens, receives orders for a special mission. Ninety-three passengers on his New York to Greece flight are shifted to another aircraft at John F. Kennedy International Airport in order to make way for Mrs. Kennedy and her 11-person party, who fly to the military base at Andravida, Greece. After landing, the party is transferred to an Olympic Piaggio, which proceeds to Skorpios for her marriage to owner Onassis. The CAB probes the mass “bumping” case, but refuses to take action unless complaints are made—and none are.
On November 8, Italians U. Giovine and M. Panichi hijack a B-707-384B with 130 aboard, shortly after its takeoff from Paris for Athens, in protest against the Greek military regime; they force the plane to return to Paris and there surrender. The two will be tried and receive French jail sentences of six and eight months, respectively.
A new B-707-384B is delivered on December 18 and is christened City of Pella.
The next day, a B-707-384C with 152 aboard, including the new Mrs. Onassis, is delayed for over 4 hours on the ground at Kennedy Airport as the result of a bomb threat; finding no explosive, police clear the plane to Athens.
Enplanements this year total 857,080. Orders are placed for two Nihon YS-11 turboprops.
In 1969, the first Nihon enters service. On January 2, ex-convict F. Paravolidakis, after firing a shot at the pilot, takes control of Flight 944, a DC-6B with 102 aboard en route from Crete to Athens, and forces it to fly to Cairo. He will be tried and sentenced to eight months in an Egyptian jail.
On May 18, officials of Britain’s airline unions threaten to boycott the company on behalf of its employees if conditions under the Greek military regime make it impossible for Olympic employees to strike.
A DC-3, on an August 16 domestic flight from Athens to Agrinion with 31 aboard, is hijacked by a doctor, with his wife and two children in tow, and forced to fly to Albania. During the flight, the Greek pirate reveals that he had been jailed by the military regime and apologizes to the passengers for their inconvenience, saying he has acted to save his family.
To prevent further hijackings, the company, beginning on September 23, requires all passengers on domestic flights to present identification cards or passports.
On December 8, a DC-6B with 5 crew and 85 passengers en route from Crete to Athens with 90 passengers, crashes during a storm into Mount Paneion near the Sounion beacon, 21 nm. from its destination; there are no survivors.
Bookings for the year skyrocket to 1,544,290.
The Comet 4Bs are returned to British European Airways Corporation (BEA) in 1970 as four B-727-284s and four Nihon YS-11s join the fleet. On July 30, the B-727-284 Flight 225, en route from Beirut to Athens with 55 aboard, is hijacked by 6 Arab terrorists; the plane flies to Athens. The plane is held on the ground as the pirates demand the release of 7 other Arab guerrillas held in local jails.
Company President Onassis and two Greek government officials offer themselves as hostages during the negotiations, allowing the passengers to be freed. After picking up the additional passengers, the hijackers fly to Cairo, taking IRC official A. Rochat along as guarantor of the arrangement. At Cairo, freedom is eventually agreed and the plane is allowed to return to Athens on September 7.
On November 5, the nosegear of a DC-6B collapses after the plane’s landing at Kerkira, Corfu, causing the Douglas to run off the left side of the runway and come to a stop 450 ft. out; there are no fatalities.
Although freight is off 3.4%, passenger bookings for the year jump 11.1% to 1,737,109. Airline employment is up 28.6% to 5,357.
The wholly owned subsidiary Olympic Aviation, S. A. is formed in 1971 to operate service and local flights on behalf of its parent; initial equipment consists of Cessna and Piper lightplanes.
En route from Kalamata to Athens on October 16, a YS-11A is hijacked to Beirut by a lone gunman. Ten days later, another YS-11 en route from Athens to Crete, is diverted to Rome by a single assailant who is overpowered on the ground at the Italian capital.
Olympic adds additional destinations in Europe, the Middle East, and Africa during 1972. With the introduction of service to Sydney, Australia, Olympic now flies to five continents. Between February 12 and June 28, six B-720-051Bs are received from the American carrier Northwest Airlines. They are named in honor of rivers: Axious, Ache-loos, Pinios, Strimon, Evros, and Allakom.
On May 28, in an effort to obtain medical treatment in London, a lone assailant hijacks a B-707-284B with 130 passengers en route from Crete to Athens. At his destination, he is surprised by police and captured. He will be tried and receive a two-year prison term.
While approaching Athens in poor visibility after an October 21 flight from Corfu, a YS-11A with 4 crew and 49 passengers crashes into the sea off the capital city (37 dead).
Orders are now placed for Boeing 747-100s. All of the Comet 4Bs having been disposed of, the fleet now includes 5 B-727-284s, 6 B-707-284B and B-707-284Cs, 5 B-720-051Bs, 6 DC-6Bs, 5 DC-3s, and 5 Nihon YS-11As.
Another B-707-051B the Hestos River, arrives from Northwest Airlines on January 17, 1973, followed by two B-707-351Cs on March 23 and May 18, respectively. Meanwhile, on January 22, a Piaggio 136, piloted by Alexander Onassis, with Capt. Donald McGregor and Donald McCusker as passengers, fails its takeoff from Athens and crashes; young Onassis is fatally injured. Believing the government behind the disaster with assistance from the U. S., Aristotle Onassis blames the U. S. CIA and McCusker (believed to be an agent) for his son’s death.
The first B-747-284B is delivered on June 21; christened Olympic Zeus, it is used on the New York route beginning in July. A second B-747-284B, the Olympic Eagle, arrives on December 7. North Atlantic traffic grows 50% during the year due to a special $320 nonaffinity roundtrip fare.
Having requested reimbursement for his medical expenses, Capt. McGregor receives a settlement from Olympic in July 1974; he is given $15,000 (less 15% legal fees). Owner Onassis refuses to allow his lawyers to settle with Capt. McCusker, even after the injured man’s lawyers threaten to impound a B-747 in the U. S.
As of September 8, the company’s Greek pilots refuse to fly with their American colleagues because of the U. S. government’s policy regarding Cyprus. The Greeks ask the Greek transport ministry to dismiss the 11 U. S. employees, including 7 pilots and 4 flight engineers.
In December, following heavy losses (estimated at ?15,000 sterling), Chairman Onassis relinquishes his special concession and agrees to turn his airline back to the Greek government.
Enplanements for the year are 2,172,911. The company is grounded pending reorganization.
On January 1, 1975, the government, as sole shareholder, assumes control of Olympic and assigns management of its operations to the Ministry of Transport, which names George Theofanos chairman/CEO. Airline employment is cut 32% to 7,443. Domestic flights begin in the spring and international frequencies are resumed, with new services started to Libya, Saudi Arabia, and Kuwait.
Financial settlement is reached between Onassis and the Greek government in August. Negotiations for the transfer have been difficult, but eventually, the tycoon receives $69 million, $34 million of which is earmarked to pay the airline’s outstanding debts. He is allowed to keep the company’s real estate (worth $10 million), permitted to sell two Strato-liners to Jordan for $9 million, and given a Learjet and two helicopters valued at $5 million.
En route from Athens to Mikonos on September 27, a Shorts SC-7 Skyvan is subjected to an attempted hijacking by a lone assailant holding a bottle of fluid he claims is nitric acid. The man is overpowered by the crew and other passengers and is turned over to police when the little aircraft lands at its destination.
Passenger boardings climb 23.3% to 2,832,646, but cargo is down by 32%.
The employee population grows to 8,486 in 1976. The fleet now includes 2 B-747-284Bs, 6 B-707-284B/Cs, 7 B-720-051Bs, 6 B-727-284s, 3 Shorts SC-7 Skyvans, and 7 YS-11As. On June 26, the Hermes is the first of four B-737-284s named for Greek gods to arrive during the next six months.
Service is inaugurated to Dubai and Melbourne, bringing the carrier’s total international destinations to 27 and domestic stops to 30.
Diverted from Larissa to Kozani on November 23 because of poor weather, a YS-11A with 4 crew and 46 passengers, on initial approach after a flight from Athens, crashes into a mountain 15 nm. S of Kozani; there are no survivors.
Late in the year, flight and ground hostesses and ticket agents receive new uniforms created by Greek designer Roula Stathia.
Passenger bookings soar 49.2% to 4,354,589.
Enplanements drop to 3,943,589 in 1977, due partially to a strike by stewards and stewardesses that halts company operations on July 24.
Airline employment in 1978 is 9,002. A strike by cabin crews idles the carrier as of January 20. A computerized reservations sys-temis purchased. Routes are extended weekly to Tirana, Albania, and
Reintroduced to Tel Aviv, Milan, and Jeddah. The total number of destinations visited by President Nicholas Farmakidis’ carrier is now 23.
During the spring, Olympic finally settles with Donald McCusker for the January 1973 crash that killed Alexander Onassis; the payout is $800,000.
The Boeing Airplane Company discloses its foreign payoffs on August 1, including a $1.75 million payment to Aristotle Onassis, during the early 1970s, in connection with the sale of two Jumbojets to his airline. Five Airbus Industrie A300B4-203s are ordered.
Passenger boardings jump 20.7% to 4,973,316 and cargo accelerates 3.8%.
The number of workers is decreased 0.8% in 1979 to 8,932. The first two A300B4-203s are delivered and are placed in service on regional routes. On June 5, 110 of the carrier’s 128 flight engineers strike. A new reservations system is turned on.
Bookings climb 8% to pass the five million mark for the first time (5,129,855); freight grows 11% to 69.4 million FTKs.
Airline employment is cut again in 1980, down by 1.6% to 8,788. The remaining two of the three Airbuses join the fleet, as orders are placed for a sixth, plus two more B-737-284s.
Effects of the fuel crisis and world recession are felt as boardings dip 3.6% to 4.943,000; cargo is, however, up 2% to 70.77 million FTKs.
Yet another A300B4-203 and two B-737-284s are placed in service in 1981. On December 31, Theodoros Lianos becomes president.
Enplanements rebound 1.2% to just over 5 million, while cargo accelerates 16.8% to 82.7 million FTKs. On total revenues of $497.4 million, expenses are $525.7 million, producing a loss of $79.9 million.
The employee population is 9,586 in 1982 as retirement of the former Northwest Airlines B-720-051B is completed. A flight attendants strike grounds the carrier on June 26.
Passenger boardings accelerate 12% to 5,472,000, but freight is off by 6% to 73.81 million FTKs.
The carrier postpones its foreign and domestic schedules until mid-afternoon on January 20, 1983, as the result of a nationwide work stoppage designed to protest the government’s decision to freeze wages. Plans are made to receive three B-747-212Bs purchased from Singapore Airlines, Ltd.
Employment remains level, as bookings advance 9% to 5,971,000 and cargo climbs 8% to 79.46 million FTKs. Still, a net loss of $53.5 million is suffered.
The employee population is increased 4.8% to 10,313 in 1984. The first Jumbojet arrives from Southeast Asia on September 1 and christened Olympic Spirit; service is launched to Copenhagen, Toronto, Marseilles, and on a Singapore-Melbourne-Sydney routing.
Late in the year, a major development plan is unveiled. Designed to relieve the financial burden of domestic service and leave the carrier to concentrate on international operations, responsibility for domestic service is shifted to subsidiary Olympic Aviation, S. A. The subsidiary’s fleet is beefed up to include 20 aircraft (Shorts 330s, Dornier 228-200s, and 3 helicopters) and 31 Greek stops are turned over.
Systemwide, passenger boardings increase 17.5% to 7,012,000 (71% domestic) and cargo grows 13.2% to 89.91 million FTKs. On revenues of $455 million, the operating loss is $12.2 million and the net loss deepens to $56.7 million.
The workforce grows 17.4% to 12,102 in 1985. The last two B-747-212Bs are acquired on April 1 and December 23, respectively, and are christened Olympic Flame and Olympic Peace, respectively; the B-747-284B Olympic Zeus is sold to Trans World Airlines (TWA). Several new international frequencies are now started, plus service to Alexandria, Egypt.
Passenger traffic rises 7% to 7.5 million and freight soars 36% to 122.2 million FTKs. Revenues grow to $484.7 million, expenses jump 16% to $529.97 million, and there are record losses: $43.3 million (operating) and $113.6 million (net).
The fear of terrorism, particularly among potential U. S. passengers, has a dramatic impact in 1986. A bomb threat forces a B-747-212B
Bound for New York from Athens on January 5 to land at a military airfield in Canada; no bomb is found.
While on a March 4 domestic flight, a lone gunman attempts to hijack a B-737-284 with 76 passengers to Libya; while on the ground at Sasntorini, Greece, for refueling, the pirate is overwhelmed and arrested.
The terrorist threat causes airline employment to decline 6.9% to 11,271 as customer bookings fall 12% to 6.576,000. Freight is also down, by 14%, to 104.77 million FTKs.
The workforce is increased by 2.1% in 1987 to 12,262 as traffic resumes its upward launch. Service is started during the second half to Melbourne and Sydney via Bangkok, to Chicago via Boston, and to Barcelona.
Passenger boardings rise 1.6% to 6,680,281 and cargo is up 0.1% to 104.87 million FTKs. Although an operating profit of $53 million is generated, there is a net loss of $68.5 million.
Airline employment falls 1.1% in 1988, to 12,133 and the fleet now includes 6 B-707-284B/Cs, 4 B-747-212Bs, 6 B-727-284s, 11 B-737-284s, 8 A300B4-203s, Shorts 330s, and 7 228s. Orders are outstanding for three B-767-384s and three Avions de Transport Regional ATR42-300s. In June, weekly roundtrip service is introduced linking the nation’s second largest city, Thessaloniki, with Paris.
Later in the summer, twice-weekly roundtrips begin between Athens and Barcelona and, in December, a third frequency is offered from Athens to Melbourne, via Bangkok.
Customer bookings ascend 2.2% to 6,829,878, but freight declines 2.6% to 101.96 million FTKs. Revenues climb 10.5% to $699.5 million; however, expenses are up 13.8% and drop operating income to $39.2 million. The net loss is reduced to $62.3 million.
Company employment grows 27.8% in 1989 to 15,500. Retirement of the B-707-284B/Cs begins. A newly-delivered Olympic Aviation, S. A. ATR42-300, with 34 aboard, crashes into a mountain on the eastern Aegean island of Samos on August 4; there are no survivors.
Although passenger boardings slip 2% to 6,681,066, freight rises 1% to 103.19 million FTKs.
The workforce is cut 2.1% in 1990 to 11,906. Long-haul flights begin twice-weekly to Tokyo in September.
Customer bookings decline another 7.5% to 6,134,574, but cargo ascends 9.3% to 112.73 million FTKs. Costs exceed income and there are losses on both side of the ledger: $24.2 million (operating) and $164.3 million (net).
The payroll is sliced another 4% in 1991 to 11,429 and the fleet now includes eight A300B4-203s, six B-737-284s, three B-727-230As newly acquired from Deutsche Lufthansa, A. G., 11 B-737-284As, two new B-737-484s, three B-747-212Bs, and one B-747-284B. Four more B-737-484s join the fleet during the year and orders are outstanding for four B300B4-605Rs.
New aircraft livery is introduced and service is inaugurated to Berlin, Munich, and Barcelona. In April, the company inks its first alliance with another carrier, Austrian Airlines, A. G., which provides for codesharing on flights from Athens to Vienna.
The nation takes the first step toward airline liberalization in September when it ends the carrier’s monopoly over the provision of charter services. In December, a block space agreement is launched with Saudia (Saudi Arabian Airlines) on Greek flights from Athens to Jeddah and Riyadh.
The impact of the Gulf war and recession on Greek tourism is negative and consequently, the state carrier suffers a decline in passenger traffic. Boardings fall 18.3% to 5,044,974, while freight inches up 1.4% to 114.24 million FTKs. Revenues slide 7.4% to $737.6 million, but expenses are higher. The operating loss deepens to $96 million, but the net loss is cut to $141.3 million.
The number of employees drops a further 5% in 1992 to 10,861. Emmanuel Fthenakis is named managing director, the first of four requested A300B4-605Rs is placed into service, and flights are begun to Beirut, Boston, and Chicago.
Olympic Aviation, S. A. now becomes operationally independent of its parent. Also, the whollyowned subsidiary Macedonian Airlines, S. A. is established to operate charter flights from the Greek province of Macedonia with leased B-737s.
Customer bookings recover and ascend by 11.6% to 5,629,952. Cargo, however, now slides by 6.3% to 107.07 million FTKs.
Airline employment is cut an additional 11.7% in 1993 to 9,600 as the second A300-600R is delivered. New markets are initiated at Naples and Damascus. Failing to win a halt to unprofitable international routes or to win acceptance for a restructuring designed to lower the $1.3 billion debt, MD Fthenakis resigns in July. He is succeeded by Theodoros Tsakiridis.
Except for the retention of six hubs, financial responsibility for all domestic routes is passed to Olympic Aviation, S. A. in December.
Passenger boardings slip 1% to 5,569,834, but freight jumps skyward by 18% to 126.35 million FTKs. The year’s losses are severe: $73.96 million (operating) and $580.39 million (net). The company’s cumulative debt is now $2.1 billion.
During January 1994, Managing Director Tsakiridis seeks a Dr 17-billion ($68-million) loan from commercial banks to cover operating costs during the first quarter. After a rejection the previous year, the new Greek government’s transport minister, loannis Charalabous, meanwhile, again asks the EU Commission for permission to write off the airline’s Dr 325-billion ($1.3-billion) cumulative debt over the next five years.
In May, Minister Charalabous asks the company to lay off over 1,700 employees in an effort to reduce its $1-billion debt. Wages are frozen at the previous year’s level and plans are announced to end Athens-Tokyo and Chicago services and later flights linking the Greek capital with Vienna, Amsterdam, Australia, and Canada. A Jumbojet is sold and two leased Airbuses are returned.
During the final week of July and at the same time it approves a large bailout for Air France, the EU Commission authorizes the government of Greece to inject $2.28 billion into Olympic Airways, S. A. over the next several years. The bailout will consist of a $1.8-billion write-off of debt, the placement of Dr 54 billion ($276 million) in loans, which will be converted into equity, and the infusion of Dr 54 billion ($276 million) in new capital in annual tranches through 1997.
There are, however, stringent conditions: (1) the Greek government is no longer permitted to interfere in the airline’s management; (2) no additional government subsidiaries will be permitted; (3) Olympic is to obtain a “common law enterprise” legal status; (4) wages must be frozen in 1995-1996; (5) labor must agree to work rule concessions and other cost-cutting measures; (6) fleet expansion plans must be cut back; and (7) European competitors will be permitted improved access to routes serving the Greek islands.
Services from Athens to Tokyo and Chicago end on November 2. A B-737-284A is hijacked during a flight from Germany on November 8 by 24-year-old Kostas Tsenkides; following the plane’s arrival at Salonika, the pirate releases his captives and is arrested by police.
Also in November, two Eurocopter AS-355 TwinStar helicopters are placed into daily service from Athens on emergency medical service (EMS), transport, and cargo flights to 10 of the Greek islands, including Corfu and Rhodes.
The state-aid package is endorsed by the Greek Parliament in December. Late in the year, Prof. Rigas Doganis, chairman of the Department of Air Transport at Cranfield University (U. K.), is named chair-man/CEO effective in February.
Customer bookings recover, growing by 6.3% to 5,923,185 and cargo marches along, up 6.8% to 135 million FTKs. Revenues shoot up 12.7% to $936.58 million, while expenses rise only 2.6% to $928.84 million. Consequently, there is an operating surplus of $7.74 million and net loss “improves” to $37.04 million.
Airline employment declines by 11.7% in 1995 to 9,140. Following a threat of sabotage with poison gas, a B-747-212B is held in a remote section of New York (JFK) following its arrival from Athens on March 20; no attack is made and the plane is released.
Once Chairman/CEO Doganis is aboard, he undertakes a massive restructuring of the company under terms of the European Commission’s state-aid plan. In return for the Greek government’s first $81.4 million in funding received in July, he begins implementation of a 15% reduction in force, which will be largely completed by Christmas, along with the implementation of new work rules. A massive customer service training program is implemented for 5,500 employees.
Expenditures are cut across the board and the unprofitable route to Tokyo is terminated; frequencies across the Atlantic are also trimmed. Two A300B4-203s are returned to their lessor as the company renews efforts toward fleet planning and consolidation; no new nonreplacement aircraft will, however, become available for three years.
Just before landing at Athens after a service from Sydney on November 9, a B-747-212B is captured by a lone assailant, who holds a knife against the throat of a female flight attendant while protesting that he does not wish to return to his native Ethiopia. Once the Jumbojet is on the ground in Greece, the pirate is overwhelmed by police.
Late in the year, a new hub is established at Thessaloniki.
Enplanements for the year inch up 3.3% to 6,119,397, but freight falls 13.4% to 116.99 million FTKs. Revenues dip 0.9% to $941.83 million, but costs fall a heavier 5.6% to $886.64 million. As a result, there is an operating profit of $55.18 million and a net gain of $27.9 million. These figures are later significantly adjusted, rising to $60.54 million and $57.2 million, respectively.
The workforce is cut 10% in 1996 to 8,625. Two important international agreements begin during the first quarter. In January, Olympic arranges block-space on VASP Brazilian Airlines; Viacao Aerea Sao Paulo, S. A. return flights from Rio de Janeiro and Buenos Aires to Athens are begun. The same sort of accord begins with Swissair, A. G. on its flights to Thessaloniki from Zurich.
The Greek government moves during the first quarter to violate the first condition of the six laid down by the European Commission in 1994 for state aid. Parliament votes to give bonuses to workers accepting early retirement, which the EC views as indirect additional government support to the airline. Consequently, on March 12, it holds up the second tranche of financial aid.
On March 14, a Reuters journalist interviews Chairman Doganis at the airline’s Athens office. During the conversation, the reporter receives a mobile telephone call from a colleague attending an impromptu press conference called by Greek Transport Minister Haris Kastanides. Turning to Doganis, the surprised Reuters man informs him that he has just been publicly terminated. After firing Doganis, Kastanides implies that the former chairman has been “leaking” unauthorized information to the EC concerning the government workers’ bonuses.
In April, Prof. Doganis is replaced by onetime Pan American World Airways (1) strategic planner and now aviation consultant Jordan N. Karatzas, who now becomes the 27th Olympic chairman since the return of the airline by Aristotle Onassis in 1967.
In one of his first actions, CEO Karatzas in May appoints as consultants McKinsey & Co., asking that firm to conduct an operational review. The firm’s report will suggest methods for improvement of the company’s management, including the installation of new financial software.
As a result of the government’s April meddling, the EC in July blocks the second installment of state aid ($98.5 million) from the government to the airline.
In September, a B-747-1D1, B-737-291A, and two Lockheed L-1011 TriStar 1s are subleased from Air Atlanta Icelandic, H. F. This additional capacity is employed to fly home eligible voters of all parties from points throughout Europe so that they may vote in the parliamentary elections.
Passenger boardings accelerate 6.3% to 6,502,327 while 119.24 million FTKs are operated, a slight 1.9% growth. Operating income inches up 1.5% to $991.5 million and costs climb 2.3% to $685.3 million. Operating gain falls to $51.3 million and net profit slides to $46.63 million.
The fortieth anniversary year is celebrated in 1997 as employment is cut by 20% to 7,250. In April, shared code flights begin with Balkan
Bulgarian Airlines over a route from Athens to Sofia. Dual designator Athens to Bucharest flights commence with Malev Hungarian Airlines at the same time, followed by new services to Moscow and Budapest.
Under terms of a new code-sharing agreement with Aerosvit Airlines, a flight operated by the Ukrainian carrier from Kiev to Heraklion begins in June, while in July, twice-weekly return flights are undertaken from Kiev to Malta.
Work continues apace on implementation of the McKinsey restructuring report and fleet modernization moves are made with an August order for two Airbus Industrie A340-300s and four Next Generation B-737-800s for delivery at the end of the century. The Boeing request is valued at $408 million. CEO Karatzas is unable to advance the carrier’s restructuring plan in the face of union opposition.
Just after landing at Thessaloniki in heavy rain following an August 12 service from Athens, Flight 171, a B-727-230 with 8 crew and 26 passengers, begins to hydroplane toward the sea; the pilot steers the trijet off the right side of the runway at the last moment. Although the plane is damaged, there are no fatalities.
In September, the EC grants tentative approval for payment of the last two installments of state aid to the carrier in one lump $150-million payment. In October, however, as controversy continues to swirl around the airline’s management, the EC appoints Deloitte & Touche to examine Olympic’s books prior to release of the funds.
Daily roundtrips to Prague commence in the fall. In November, the EC elects not to pursue an antitrust case against the airline in exchange for changes in Greek airline employment laws and an end, as of January 1, to the carrier’s ground handling monopoly at Athens Airport.
Having abandoned the company’s restructuring program in the face of union opposition, CEO Karatzas is terminated by Greek Transport Minister Tasos Mantelis in December. Pledging to end political interference with the airline’s management, Mantelis threatens to replace the entire 15-member board of directors if that extreme measure is required.
Passenger boardings surge ahead by 9.1% to 7,091,472 while freight grows 8.3% to 128.9 million FTKs. Revenues total $1.01 billion, with expenses of $964.1 million. There is an operating profit of $48.3 million, but a net loss of $25.1 million.
Airline employment stands at 6,672 in 1998 and the fleet, 48.7% of which is Stage Ill-certified, includes 39 airplanes: 9 B-727-200s, 18 B-737s, 4 B-747s, and 8 A300B4s.
In January, Theodoros Tsakiridis returns as chairman/managing director while the Greek government, in its efforts to meet EC demands, declares that the wages paid to airline employees are too high. Minister Mantelis proclaims that Olympic must save at least Dr 50 million ($160 million) for each of the next five years or face closure.
In February, Olympic begins a process of employee rationalization (i. e., termination), firing 64 seasonal flight attendants.
EISF, the flight attendants’ union, protests the terminations and begins a work slowdown. As a result, by month’s end, Olympic must cancel some 12 national and international flights per day because it does not have sufficient staff to safely operate them.
Disputes between the company and its workers continue into the second quarter. In April, employees strike over a proposed wage freeze designed to help the company meets its cost-cutting annual goal.
As pilot and cabin staff strikes continue, Olympic, in May, is forced to borrow Dr 4 billion ($12 million) from two state banks to make the payroll, trusting that revenues from services in June will cover the loans. In June, the government announces that it will no longer guarantee loans to loss-making public sector entities—including Olympic.
The first of five A340-313s is delivered in September; the premier aircraft is christened Olympia. Two more are ordered on December 18.
Passenger boardings fall 9.3% during the year to 6.4 million, while cargo traffic drops 12% to 112.02 million FTKs.
Two more A340-313s arrive on February 8, 1999, with two more scheduled for delivery later in the year. Like the machine received in the fall, the Airbus aircraft replace B-747-284Bs on the carrier’s intercontinental routes to North America, Australia, the Far East, and South Africa.
Just prior to the government deadline of February 15 for interested outside bids on a contract to manage the airline, Chairman/Managing Director Tsakiridis resigns.
In anticipation of air strikes by NATO countries against Serbian military targets in a campaign to compel Belgrade to accept a peace agreement with the ethnic Albanians fighting for an independent Kosovo, Olympic, on March 24, halts all scheduled service into Belgrade, as well as nine other Balkan destinations. A spokesman, in making the announcement, indicates that the situation will be evaluated further toward evening; however, that evening, Operation Allied Force, the NATO bombing campaign on targets in Serbia and Kosovo, begins.
Service to Belgrade remains halted on March 25 and for the duration of Operation Allied Force. Flights throughout south-central and southeastern Europe experience delays of 30-60 minutes due to airspace closure.
Callers to a special information line set up by the airline to aid passengers are told, on March 30, that the airline is not flying. Olympic officials are not amused by the prank and ask OTE, the Greek state-owned telephone system, for assistance in finding the person(s) responsible for the incorrect message.
The company admits on April 26 that it has suffered some loss from the Kosovo crisis, but does not yet fully know the impact. There will certainly be a large impact, executives worry, should the matter continue into the tourist season, set to begin at month’s end.
Operational Allied Force concludes on June 11. After years of debt and failed restructuring at the national carrier, Greek Transport Minister Tasos Mandelis on June 23 informs Parliament that European Union rules will not permit the state to continue bailing out the loss-making airline. Olympic, he admits, is the worst performer in the cash-starved Greek public sector; it is also realized that the airline has become a test case in the reform program of Prime Minister Costas Simitis.
Thus it is announced that, following a bidding competition, management of the airline, in a last-ditch effort to keep it from bankruptcy, will be turned over to Speedwing, Ltd., the British Airways, Ltd. (2) subsidiary on July 1, under a 30-month, ?6.3-million contract. The team of Rod Lynch, BA senior executive, and Capt. Jack Lowe, the former managing director of Air Europe, Ltd. and the popular and most experienced Concorde pilot, both personally recruited by BA-2 CEO Robert Ayling, will attempt to make the Greek carrier profitable. If they succeed, BA-2 will have the option to purchase a 20% equity stake and take Olympic into the “OneWorld” alliance; if they fail, the Greek government will permit Olympic to go bankrupt.
Over the remainder of the month, much of the Greek press, plus politicians and labor leaders, castigate both the arrangement and the British, with particular abuse falling on Mr. Lynch. In Athens, the new CEO informs a parliamentary committee that he and Lowe have not come to change Olympic, but to undertake and enhance its existing activities. The Greeks are assured that BA has no hostile plans.
Upset that the fate of their airline has been placed in the hands of a competitor and not mollified by Lynch’s testimony, airline workers stage a 24-hr. strike on July 1, greeting their new British bosses with what has become a common demonstration of displeasure. More than half the days flights must be grounded, bringing additional fiscal losses. Threats of additional strikes force Economic Minister Yannos Papandoniou to warn, in a July 4 interview in Apoyevmatini, that unless employee cooperation is forthcoming, the airline may be sold outright.
On July 7, Papandoniou again appeals to workers, promising that Speedwing will not cut jobs or shrink Olympic domestic flights, though they are authorized to alter the international schedule. Workers again walk out, forcing Olympic to cancel 50 of 79 domestic and international flights.
The initial unrest dies down as July passes into August. During these summer months, CEO Lynch orders a full review of Olympic’s fleet as his management team prepares for a September meeting with EU officials. The Speedwing consultants must convince EU regulators that Olympic is proceeding in a manner required to receive state aid.
While en route from Athens to Bucharest on September 14, a Dassault Falcon 900 bizjet, operated by Olympic on behalf of the government of Greece, enters into a rapid descent. Of the 13 persons aboard, 6 are fatally injured and 3 are seriously hurt. The flight crew is uninjured and is able to land the aircraft safely at its Romanian destination.
The last two of four A340-313Xs to be received during the year arrive at Athens on October 14 and 25, respectively.
With Chairman G. Zigoyannis aboard, a company A340-313X flies from Athens to New York (JFK) for the first time on December 9. It receives an arch-of-water welcome from a pair of fire department tankers.
Customer bookings drop 1.6% this year to 6.36 million, while freight traffic falls 8.3% to 103.27 million FTKs.
Airline employment at the beginning of 2000 stands at 6,584, a 0.2% decrease over the previous 12 months. The B-737 fleet includes 1 Dash-33R, 7 Dash-484s, 5 Dash-4Q8s, and 1 Dash-4Y0.
Olympic Club business service is introduced on February 8 aboard company flights from Athens to Alexandroupoli, Chania, Corfu, Herak-lion, Kavala, Koa, Mitilini, Rhodos, and Thessaloniki.
On March 17, the board of directors votes to fold the carrier’s inhouse tour service, Olympic Airtours, back into the parent organization, placing it under the sales and marketing department.
Thrice-weekly return service to Belgrade is resumed on March 23.
Arrangements are completed on March 24 for the long-term lease, beginning in June 2001, of 11 Next Generation B-737-700s and 4 Next Generation B-737-800s; 15 older aircraft will be subchartered or, if owned, sold.
When the summer schedule begins on March 26, weekly frequencies from Athens to Amman, Bangkok, Boston, and Sydney are increased to three; those to Montreal, Moscow, and Toronto are increased to four. Berlin is increased to five, Dubai to seven, and New York (JFK) to nine per week. Daily frequencies from Athens to Frankfurt, Munich, and Paris (CDG) are increased to two, and those to London (LHR), Milan, and Rome are increased to three. From Thessaloniki, service to Berlin becomes thrice-weekly, while new daily roundtrips are introduced to Munich and London (LGW). At the same time, service to Melbourne ceases.
An early morning B-737-484 return service is inaugurated on March 28 between Athens and London (LHR). A third A300-605ER is placed into service on April 3 on the route between Athens and Thessaloniki. Thrice-weekly B-737-284 return flights commence on April 30 from Athens to Benghazi.
On May 16, an order is placed with Boeing for 11 Next Generation B-737-784s and 4 Next Generation B-737-884s with which to modernize its fleet prior to the 2004 Athens Olympiad. At the same time, agreement is reached with GECAS under which the carrier will sell to the GE leasing arm 11 of its B-737-200s and then charter them all back until the new Boeings arrive in 2001-2002.
With Olympic still in difficulty, British Airways, Ltd., (2) announces on June 2 that it will not purchase a 20% equity stake in the Greek flag carrier. In fact, it has also terminated its Speedwing, Ltd. management consultancy early, but under a timetable agreeable to the Greek government. In an interview with the BBC, former Olympic CEO Rigas Doga-nis criticizes the Speedwing operation, particularly its failure to bring the Greek side of the carrier’s operation into its decision-making process.
At this point, the Greek Minister of National Economics and Transport Chris Verelis brings in Price Waterhouse Coopers and Credit Suisse First Boston to conduct an audit and find new management
Four-times-a-week Fokker 100 return service from Venice to Athens, code-shared with Alpi Eagles, S, p,A., begins on June 11.
Thrice-weekly A300-605ER roundtrips begin on June 18 from Athens to Boston via Manchester, England; the next day, thrice-weekly return flights are started from Athens to Tehran. Chairman Stelios Haji-Ioan-nou of easyJet Airlines, Ltd. bluntly denies media rumors on July 18 concerning his possible purchase of the Greek flag carrier: “I wouldn’t take Olympic,” he says, “not even as a gift!”
AirlinersOnline. com reports on August 9 that the carrier has informed the British Airways, Ltd. (2) subsidiary Speedwing that it will not pay the British company’s consulting fee and that, if it wishes to collect anything on the debt, it can sue. By now, the government has received the results of its financial audit of Olympic and has found the airline near collapse. It owes huge sums to various state agencies for fuel, health insurance payments, landing fees, and so forth.
In an effort to keep the airline going and to keep its privatization plans alive, an appeal is now made to the EU Commission for permission to receive a third tranche of state funding earlier denied. Representatives of Olympic’s trade unions travel to Brussels to lobby for the aid. Both the plan and the workers are met with a negative reaction as the European Union stays with its earlier position.
In early September, Minister Verelis puts forward a new plan to the cabinet of the Socialist Greek government to remedy the flag carrier’s problems. Under his scheme, Olympic would be broken into two halves. One unit, about 65% of the whole, would retain all airline operations with a view to privatization while the other would be saddled with all of the company’s debts. The funds raised from the sale of the larger part could then be used to cover the sums owed by the other unit. The scheme is met with negative comment from opposition parties, creditors, and even the EU Commission.
The carrier announces on October 10 that it will soon reopen its office in Nairobi; the company had pulled out of Kenya in December 1998. On October 31, economist Agelos Christodoulatos is appointed chief financial officer.
Despite the UN embargo, Olympic, on November 11, becomes the latest European or African airline to operate a humanitarian flight to Baghdad, Iraq.
B-737-484 return service between Athens and Manchester, England, grows from twice weekly to thrice weekly on November 13.
In an unusual admission of failure, this time in the case of Olympic’s reform, the Greek government, on December 8, places an ad in the Financial Times seeking parties interested in purchasing a majority stake in its troubled flag carrier. The same day, the government announces that it is seeking tender proposals, by the end of January, for its 51% majority stake in Olympic.
Taking pains to stress its findings are not a reflection on Olympic, the U. S. FAA reports on December 21 that civil aviation authorities in Greece are failing to meet international safety standards set by ICAO. The finding does, however, require the FAA to give Greece a Category 2 safety rating and to mount a closer scrutiny of Olympic and other Greek carriers. No Greek carrier will be allowed to expand its services into the U. S., except through the wet-leasing of U. S.-registered aircraft, until the poor rating improves.
Two B-727-284s have been withdrawn from service in these 12 months and await scrapping at Athens.
As the year ends, Credit Suisse First Boston, which is advising the Greek government on the airline’s privatization, will note that six concerns have come forward to express an interest in acquiring a stake in the national airline. The only airlines planning offers are Cyprus Airways, Ltd. and Axon Airlines, S. A. Bids are anticipated by the end of March.
OLYMPIC AVIATION, S. A.: 96-100 Syngrou Ave., Athens, GR-16604, Greece; Phone 30 (1) 936-2681; Fax 30 (1) 936-3282; http:// Www. olympic-airways. gr; Code 7U; Year Founded 1971. The wholly owned subsidiary Olympic Aviation, S. A. is formed by Olympic Airways, S. A. on August 1, 1971 to operate domestic service and local flights on behalf of its parent. Previously operated as the parent’s light aircraft division, the company’s initial equipment consists of 9 Cessna and Piper lightplanes and 2 helicopters.
In addition to replacement services, charters, and cargo flights flown in 1972-1973, Olympic Aviation also enters into the flight training business, opening what will become an internationally recognized Pilot Training School.
In 1974-1975, the carrier is shifted from the private ownership of Aristotle Onassis to the government at the same time and manner as Olympic Airways, S. A. The company also undertakes charter flights to offshore and holiday destinations. Services continue with little change during the remainder of the decade and into the early 1980s. Beginning with the delivery of the Isle of Skiathos, two Shorts SC-7 Srs. 3 Skyvans are acquired in 1981-1983.
Late in 1984, a major development plan is unveiled by parent Olympic Airways, S. A. Designed to relieve the financial burden of domestic service and leave itself free to concentrate on international operations, the approach shifts responsibility for domestic flights to the Olympic Aviation, S. A. subsidiary. The subsidiary’s fleet is beefed up to include 2 Dornier 228-201s, 2 Shorts SC-7 Skyvans, 2 Britten-Norman BN-2 Islanders, 1 Piper PA-23 Aztec, 1 Bell 206, 2 Aerospatiale AS-350B Ecureuils, and 1 AS-318 Alouette. Beginning in 1985, 31 Greek stops are turned over.
Director General G. Gilkopoulos acquires six Shorts 330s in 1986. Destinations visited now include Karpathos, Kasos, Kastoria, Kithyra, Kos, Kozani, Larissa, Limnos, Mykonos, Mytilini, Paros, and Preveza. Late in the year and in 1987, seven additional Dorniers arrive.
A. Rigos becomes director general in 1988 as two Dornier 228-201s are withdrawn. Destinations visited at decade’s end include loannina, Thessaloniki, Tirana, Chios, Kalamata, Karpathos, Kastoria, Keffallo-nia, Kithira, Kozani, Leros, Limnos, Milos, Mykonos, Naxos, Paros, Preveza, Samos, Santorini, Sitia, Skiathos, Skyros, Syros, Zakynthos, Rhodes, and Iraklio.
Three Avions de Transport Regional ATR42-320s are ordered in January 1989.
Having deviated 4 nm. from its course on a service from Thessaloniki on August 4, a Shorts 330-200 with 3 crew and 31 passengers crashes into Mt. Kerkis, 8 km. NW of Samos; there are no survivors.
Capt. Kiriakos Avgerinidis becomes director general in 1990 and bolsters the fleet with the acquisition of two ATR42-320s (the first of which arrives in January).
Two more ATR42-320s arrive in 1991 as one Shorts 330 is withdrawn. The first of three ordered ATR72-210s is delivered during the summer. On January 1, 1992, the carrier becomes operationally independent of its parent. A second ATR72-210 arrives and enplanements total one million.
Airline employment stands at 520 in 1993 as a third ATR72-210 is delivered. Two new routes are opened from Athens—to Istanbul via Sa-lonica and to Corfu via Salonica. A new hub is established at Salonica and by year’s end the company becomes financially independent of its parent, assuming fiscal responsibility for all domestic routes, except six hubs, including Corfu and Rhodes. The airline receives its own designator.
During the 12 months, scheduled departures total 39,930 and enplanements are 1,069,031.
The fleet in 1994 includes 6 ATR72-210s, 4 ATR42-320s, 1 Dassault Falcon 900,7 Dornier 228-201s, and 5 Shorts 330s, all of which are later withdrawn and placed up for sale. Thrice-weekly ATR72-210 service is started from Athens to Tirana in Albania in April.
The year’s scheduled departures slip to 39,651 as customer bookings ascend to 1,194,388.
Flights continue in 1995. During the spring of 1996, return flights commence between Thessaloniki and both Belgrade and Bucharest. Dr. Petros Stefanou becomes director general. A total of 1,346,635 passengers are flown on 41,350 scheduled departures.
While landing at Paros on May 2, 1997 after a flight from Athens, a Dornier 228-201 with 2 crew and 18 passengers, touches down 4 ft. short of the runway; the mistake causes the nosegear to collapse. Although the aircraft is badly damaged in the subsequent 170-m. slide, there are no fatalities.
The number of scheduled departures climbs to 41,552 and enplane-ments reach 1,428,732.
Destinations added during the year and into 1998 include Sofia, Rhodes, Cairo, Larnaca, Corfu, Brindisi, and Venice. Fights to Skopje are discontinued on October 30. Enplanements for the year total 1,245,928.
It is announced on May 7, 1999, that Olympic Aviation has become the European launch customer for the Boeing 717-200. Having signed a lease with Bavaria International Aircraft Leasing Company for two of the aircraft, the company will place the planes, following their delivery in the fourth quarter, into service on routes from Athens and Thessaloniki to the Balkans.
Weekly ATR72-210 roundtrips commence on September 21 from Athens to Skopje; the new service becomes thrice weekly on October 31. Customer bookings this year slide to 1,190,936.
The workforce at the beginning of 2000 totals 575.
Two Boeing 717-2K9s, chartered via Bavaria International Aircraft Leasing, are delivered to company representatives at a Long Beach, California, ceremony on January 6, with the first christened Andromeda. The two aircraft begin the premier service by their type in Europe at the end of the month, operating from Thessaloniki to Amsterdam, Berlin, Brussels, Munich, Paris, Stuttgart, and Larnaca.
World History
