Greek state Olympic Airways to be replaced by Pantheon Airways

Sep 16, 2008, 11:01 GMT

Athens - The Greek government on Tuesday was waiting for the green light by the European Commission to replace its debt-ridden state airline, Olympic Airlines, with a new carrier under the name Pantheon Airways.

Under the consolidation plan submitted by Greece, Olympic Airlines will be replaced by Pantheon Airways, which will take part in an international privatization tender.

According to state television NET, the new company will keep running all domestic flights, but will drastically reduce its international routes.

The European Commission on Wednesday had asked the European Union's highest court to impose daily fines on Greece for failing to recover illegal state aid given to Olympic Airways.

The decision refers to at least 161 million euros (202 million dollars) restructuring aid to Greek's ailing national airline between 1998 and 2002.

In December 2002, the commission ruled that the aid was illegal and demanded Athens get it back.

The EU executive has also taken Greece to court for failing to recover some 540 million euros of state aid given to Olympic and its successor, Olympic Airlines, from 2002 to 2004.

According to news reports, the new airline, Pantheon, is expected to receive an operating permit in the next few weeks and will open negotiations with Olympic Airlines personnel.

The more than 4,500 employees of Olympic will have to choose between becoming voluntarily redundant, securing bonuses and full pension rights, or be transferred to public posts or to work for the new company.

'Olympic Airlines services to islands will not stop, the employees will be secure and the transition to the new company will be as quick as possible,' the Transport Ministry said in a statement.