Latest News
HomeAssociationsTourism sector paying `high price` for OA

Tourism sector paying `high price` for OA

The tourism sector has paid dearly for the difficulties that continue to plague state-owned carrier Olympic Airways<.>, solutions to which are harder to find…

The tourism sector has paid dearly for the difficulties that continue to plague state-owned carrier Olympic Airways<.>, solutions to which are harder to find as competition in air travel heightens, industry representatives asserted last week.

Stelios Golemis, general secretary of the Association of Greek Tourist Enterprises (SETE<.>), told reporters that the organisation was deeply concerned over OA – which posted losses of 8 billion drachmas last year – not in relation to what is happening but what is not happening. At the start of the month British Airways subsidiary Speedwing put an end to its 11-month-long effort to return the Greek airline to profitability and declined to take up an option to purchase up to 20% of the company.

OA`s problems are serious and, with the passing of time, they are becoming more acute, he said, If they had been solved a year ago, it would have been easier but competition is increasing. We cannot afford further delays.

Credit Suisse First Boston has been appointed financial adviser to OA`s new international tender for a new manager, who will also be encouraged to purchase a minority stake in the carrier. OA`s management will go to those who invest in the company, Golemis stated. However, management is not all that is required for it to move forward. It is not a matter of intelligent management. A complex web of interconnected issues is involved.

Emphasising that Speedwing had been the only company to submit a bid in the previous tender, SETE deputy chairman Nikos Angelopoulos said it appeared a number of firms would show interest this time.

The concept of a state carrier is outdated, not only in Greece – where private Greek-owned airlines have aggressively entered the market over the past two years and eaten into OA`s share of the domestic market – but around the world, Golemis pointed out.

He criticised the use of the term state when referring to OA, saying that bureaucracy and long-held practices, such as frequent industrial action and nepotism in hiring, had led tycoon Aristotle Onassis` pride and joy to the low point it is today. Golemis noted as an example that all other airlines must pay landing fees at the country`s airports while OA does not. The political protection it enjoys has proven both a boon and a blight, he said.

He urged for Greece to adopt an open skies policy as other countries had done and for OA to move ahead with bravery and realism.

Golemis went on to highlight that the new Athens international airport at Spata – the March 2001 opening of which he expressed doubts about – would have among the highest operating costs of any European airport. Such a large facility was created in order for Greece to become the next major air transport hub – rather than Istanbul or Rome who are hot contenders – as central Europe cannot extend its airports further. But it cannot be a hub and have such high costs. Landing fees will be three times higher than those at the airport in Hellenikon – though the latter charges less than most European airports, he stressed.

Although the government is constructing a highway linking Halandri (Stavros) with Spata, there is a severe lack of road access for those residing or staying in the southern suburbs, Golemis said.

SETE chairman Spiros Kokotos reiterated industry complaints that the annual state-funded advertising campaign for the tourism sector was usually launched too late to make an impact, Kokotos said SETE proposed the formation of a company that would deal exclusively with marketing and advertisements but still involve state bodies. Promotion is a major issue for small- and medium-sized enterprises, who make up the bulk of the industry, he noted. A second proposal concerned the setting up of a firm to run quality checks on all aspects of the sector.

Furthermore, the 2004 Games present a great challenge and the industry`s ability to provide value for money will affect it for many years to come, said Kokotos who also pressed for greater cooperation between associations such as SETE and their southern European counterparts.

Referring to the 2000 tourist season, Angelopoulos said Greece should be happy if it achieves an arrivals figure close to that of last year as competitors such as Egypt and Turkey were not facing problems which saw significant numbers of travellers choose Greece. We should not focus on arrivals so much as the average length of stay, he said, noting that the latter had dropped from 14 to 10 days.

Co-Founder & Managing Director - Travel Media Applications | Website | + Posts

Theodore is the Co-Founder and Managing Editor of TravelDailyNews Media Network; his responsibilities include business development and planning for TravelDailyNews long-term opportunities.