Olympic Airlines???

Buying out a bankrupt/failing airline…

A while back (in fact it was my first ever post!), I said that I wanted to start up my own airline, and I am now wondering whether it would be easier to take control of a bankrupt/failing airline, such as Olympic, and transform it…?

Using Olympic as an example, the government recently put the airline up for sale, however all the offers fell through for various reasons, and they are now asking for between 100-150million euros (£61m) to buy it.

Obviously I don’t have access to that kind of money, so it is not an option at this stage, but what are the chances of me being able to offer my services to a small but bankrupt/failing airline and try to help them transform it for the better…?

My experience of dealing with Olympic was that the government ran it the way they wanted, for example giving out loads of free tickets to govt employees. They brought people like Rigas Doganis to run it but then wouldn’t listen to the advice they were given.

Looking at that fleet its no wonder they are having problems. There is absoultley nothing in common betwwen any of those types. I think OA and AZ are both in the same situation. They need to hit the reset button now and start again.

Thanks to both of you for the info you have provided…it will be of use and is much appreciated.

Have you studied any economic theories, because thinking about it, deregulation (exciting stuff 😀 ) is heavily reliant on an understanding of how the markets work etc. I just opened my dissertation, here are a few suggestions for background reading if you need to concentrate on the effects of deregulation/privatisation more:

Bailey, E.E., Graham, D.R. and Kaplan, D.P. (1985) Deregulating the airlines, MIT Press, Cambridge

Bailey, E.E. and Baumol, W.J. (1984) Deregulation and the theory of contestable markets, Yale Journal on Regulation, 1:111-137

Button, K.J. (1991) Airline Deregulation: International Experiences, David Fulton Publishers, London

Doganis, R. (1991) Flying off course: the economics of international airlines, Routledge, London

Goetz, A.R. (2002) Deregulation, competition, and antitrust implications in the US airline industry, Journal of Transport Geography, 10:1-19

Keeler, T.E. (1991) Airline deregulation and market performance: the economic basis for regulatory reform and lessons from the US experience. In D. Banister and K.J. Button (eds) Transport in a Free Market Economy, Macmillan, London

Levine, M.E. (1987) Airline competition in deregulated markets: theory, firm strategy and public policy, Yale Journal on Regulation, 4:393-494

O’Connor, W.E. (1995) An Introduction to Airline Economics, Praeger, Westport, Connecticut; London

I just think its a bit difficult to dive into an essay on deregulating the industry if you haven’t done the background stuff, hope this helps.

Hi all,

I am studying an air travel degree at university, and am doing some research into globalisation/deregulation and state owned airlines…

I LOVE this topic..am sad?? :rolleyes:

And I would also like to pose this question to anyone that can answer it – why doesn’t the Greek Government let the airline go into insolvency and then rebuild from the ashes…either that or give it to someone else to transform, because they clearly cannot cope with the problems that it is causing…

Did you know… it is currently costing Greek taxpayers 1.5m Euros to operate the airline on a daily basis…!

You need to do a little more background reading I would say to understand why the airline industry started out regulated, and that will go some way to answering your question. The fact is that airlines were protected to guarantee air servcies, it was a fundamental part of the Chicago Convention, to preserve air services to generate economic prosperity. Before the major explosions in passenger demand the airliens were state owned to stop harmful competition. The benefits of having air services, which generate business links etc, were considered extremely important, and a large number of airlines fighting for a small number of passengers was not sensible in order to preserve economic growth.

To a country like Greece, the airline may be costing 1.5m euros per day, but the results of having these guaranteed links will be generating far in excess of that in the national economy each day, through direct/indirect/induced employment, but more importantly through catalytic benefits, which are essentially impossible to measure. These are the business generating effects of having air services available.

The Greek government is in a position where it is potentially generating more economic benefit by keeping it ‘in-house’ than by letting it go. If it was privatised then one ofthe first things likely to take place would be a major cull of employees and routes, neither of which would help the economy OVERALL in the short run.

This is not the exclusive answer, it is one element of many as to the reason that the airline is not privatised. And remember, 1.5m euros really isn’t a lot of money in either the airline industry or the balance sheets of a government.

Hi here is a list of there fleet:

A300-605R Olympic Airlines SX-BEM Olympic Airways B-2310 Compass Airlines
1992 A320-232 Olympic Airlines SX-BVB opb Hellas Jet Hellas Jet Hellas Jet
235 A340-313(X) Olympic Airlines SX-DFA Olympic Airways Olympic Airways
239 A340-313(X) Olympic Airlines SX-DFB Olympic Airways Olympic Airways
280 A340-313(X) Olympic Airlines SX-DFC Olympic Airways Olympic Airways
292 A340-313(X) Olympic Airlines SX-DFD Olympic Airways Olympic Airways
169 ATR42-320 Olympic Airlines SX-BIA Olympic Aviation Olympic Aviation
182 ATR42-320 Olympic Airlines SX-BIB Olympic Aviation Olympic Aviation
197 ATR42-320 Olympic Airlines SX-BIC Olympic Aviation Olympic Aviation
219 ATR42-320 Olympic Airlines SX-BID Olympic Aviation Olympic Aviation
337 ATR42-320 Olympic Airlines SX-BIM Olympic Aviation F-WQNQ Mahalo Air
291 ATR42-320 Olympic Airlines SX-BIN Olympic Aviation F-WQNZ Iran Aseman Airlines
239 ATR72-202 Olympic Airlines SX-BIE Olympic Aviation Olympic Aviation
241 ATR72-202 Olympic Airlines SX-BIF Olympic Aviation Olympic Aviation
290 ATR72-202 Olympic Airlines SX-BIG Olympic Aviation Olympic Aviation
305 ATR72-202 Olympic Airlines SX-BIH Olympic Aviation Olympic Aviation
353 ATR72-202 Olympic Airlines SX-BII Olympic Aviation Olympic Aviation
350 ATR72-202 Olympic Airlines SX-BIK Olympic Aviation Olympic Aviation
437 ATR72-202 Olympic Airlines SX-BIL Olympic Aviation Olympic Aviation
5048 B717-23S Olympic Airlines SX-BOC Olympic Aviation Olympic Aviation
5015 B717-2K9 Olympic Airlines SX-BOA Olympic Aviation Olympic Aviation
5016 B717-2K9 Olympic Airlines SX-BOB Olympic Aviation Olympic Aviation
2635 B737-3Q8 Olympic Airlines SX-BLC bmibaby G-JKID Malev
2457 B737-42J Olympic Airlines SX-BMC Olympic Airways N734AB Turkish Airlines
2109 B737-484 Olympic Airlines SX-BKA Olympic Airways Olympic Airways
2124 B737-484 Olympic Airlines SX-BKB Olympic Airways Olympic Airways
2130 B737-484 Olympic Airlines SX-BKC Olympic Airways Olympic Airways
2142 B737-484 Olympic Airlines SX-BKD Olympic Airways Olympic Airways
2160 B737-484 Olympic Airlines SX-BKE Olympic Airways Olympic Airways
2174 B737-484 Olympic Airlines SX-BKF Olympic Airways Olympic Airways
2471 B737-484 Olympic Airlines SX-BKG Olympic Airways Olympic Airways
1828 B737-4Q8 Olympic Airlines SX-BKH Olympic Airways N407KW Malaysia Airlines
1855 B737-4Q8 Olympic Airlines SX-BKI Olympic Airways N405KW Malaysia Airlines
2195 B737-4Q8 Olympic Airlines SX-BKK Olympic Airways N404KW Cayman Airways
2115 B737-4Q8 Olympic Airlines SX-BKM Olympic Airways N406KW Malaysia Airlines
2380 B737-4Q8 Olympic Airlines SX-BKN Olympic Airways N401KW Carnival Airlines
2055 B737-4Y0 Olympic Airlines SX-BKL Olympic Airways 9M-MJT Malaysia Airlines

Fokker Fan
James