At the end of September, the Greek privatisation committee gave the go-ahead for a tender to find buyers for three new companies designed to replace the loss-making and heavily indebted, state-owned Olympic Airlines. The move followed an announcement from the government that it would break up the airline and fully privatise the three units, designed to take responsibility, respectively, for flying, ground handling, and aircraft maintenance. Under the proposal, a holding company named Pantheon would receive Olympic's fleet, its landing slots, and the rights to its name and Olympic rings logo. Pantheon, which would be offered for full privatisation, would be roughly two-thirds the size of Olympic. The government had been involved in years of disputes with the European Commission that had accused it of supporting the airline with illegal state aid. The privatisations committee is made up of the ministers of finance, development, transport and labour. Prime Minister Costas Karamanlis said: 'We are moving to rid citizens of the burden of Olympic Airlines a burden that costs Greek taxpayers millions of euros each day.' Olympic, founded by shipping millionaire Aristotle Onassis in 1957, was estimated to be losing EUR2mn (US$2.9mn) a day, and had accumulated debts of over EUR2bn. The European Commission had ordered that Olympic should repay EUR850mn worth of illegal state aid, but government officials said at best only part of this was likely to be returned. Olympic has a total of 8,000 staff; under the government's plan, it would continue operating until new owners were found, with plans being discussed for the employees to be redeployed or compensated for post closures. The trade unions signalled their disagreement with this approach and announced plans for a strike at the beginning of October. 'This was a 30-year old problem. Our solution is positive for taxpayers and workers. We believe the effort to find investors will be successful,' said then-Transport Minister Kostis Hatzidakis. Taking into account the demise of the airline, in our latest Greece Freight Transport Report, BMI concludes that Greek air freight will grow by an average of 3.6% each year for the 2009-2013 forecast period. Our forecast is underpinned by various factors. The Greek economy itself will decelerate and grow at an average rate of 2.7% per annum in the next five years. Air freight will continue to play an important role in Greek integration with its traditional EU neighbours, the newly acceded countries; however, we do see a period of industry restructuring. Aviation developments come against the background of moderately positive outlook for the freight industry in general. By transport modes, one of the strongest performances will be delivered by pipelines, which we expect to grow by an annual average of 4.4% over the 2009-2013 period, measured in terms of million tonnes-km (mntkm). Greece has been seeking, with some success, to become a natural gas and oil pipeline hub. In shipping, Greek lines have benefited from the effects of the global boom that is now entering something a cooling phase. We expect annual average sea freight growth to be 2.9% per annum, a figure that reflects the relative slowdown that is developing in global shipping markets. Rail freight, responsible for only a very small share of total haulage, will grow by 2.8% per annum. Overall, BMI is forecasting that the Greek freight transport sector will grow at an average annual rate of 3.2% over the 2009-2013 period. This is consistent with the country's position in the mid-range of market development, on the geographic periphery of the European region, but likely to benefit from growing trade links. Greece scores a total of 51.6 (out of a theoretical maximum of 100) for its freight industry business environment ranking, which places it at the low end among its regional peers. The country scores strongly for political and economic risk but does less well in the other categories, such as transport sector growth and the regulatory and competitive environment. The total value of transport and communications GDP will rise to US$30.8bn in nominal terms by 2012, representing 7.7% of Greece's GDP. The transport and communications sector employed 249,000 people, or 6.2% of the labour force, in 2008 and we expect those employed in the industry to rise to 252,000 by 2013.
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