Air Transport World

An 'Olympian task.'(Olympic Airways)(Company Profile)

Athens - For Prof. Rigas Doganis, the change hardly, could be more remarkable. In January, he was head of the Dept. of Air Transport at the U.K.'s Cranfield University. Since February, he has been in Athens as chairman and CEO of Olympic Airways, with the brief to staunch the Greek national airline's severe financial hemorrhage, to slim the carrier down and put it on course for profit.

The translation from the calm theory of academia to the hot-seat practice of airline politics seems to suit ever, and in less than a year, he has gone at least some way toward raising the carrier from its knees.

Olympic was founded in 1957 by the shipping magnate Aristotle Onassis, so Doganis's use of the old supertanker adage to describe his task seemed appropriate: "The wheel is being turned, the bow is beginning to swing but it will be quite a while before the wallowing ship is turned completely around."

The new direction has been given a hefty impetus by an EU decision to agree to the plan of the Greek government - 100% owner of Olympic, Onassis having sold out in 1975 - to embark on a massive restructuring program. This involves writing off debts of 427 billion drachmas ($1.8 billion), government loans of 64 billion drachmas converted to equity and a capital injection of 64 billion drachmas, with a first tranche of 19 billion drachmas.

It is the kind of bailout from the threat of bankruptcy to which a number of European airlines - including Air France, Iberia, Aer Lingus, TAP-Air Portugal - have been subject or are negotiating at this writing, and that continues to infuriate the more successful Euro carriers, notably British Airways. Severe conditions were attached to the EU approval, including a ban on any fleet expansion until 1998, and with replacement only of short/medium-haul aircraft allowed, a demand that the airline should be completely restructured. Also, no further bailout will be allowed.

Looking over its shoulder at the EU, the Olympic management, under Doganis, will retire 2,000 employees by the end of 1997. …

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