Olympic Air Cuts Thessaloniki, Crete, Rhodes

In another sign of trouble for the national air carrier founded by Aristotle Onassis, the struggling Olympic Air said it is suspending three of its major domestic routes – to Thessaloniki, Rhode and Iraklio on Crete.
The airline’s officials cited what it called the company’s “huge contribution to the Greek economy and society under very difficult financial conditions,” an indicator of how deep are its financial difficulties.
A similar move was made in 2009 when Marfin Investment Group acquired Olympic from the state and highlighted the airline’s role in Greek society while announcing the reduction of its services.
Olympic informed travel agents that as of October 13 it will cease to connect Athens with Thessaloniki and Iraklio, while flights to the island of Rhodes will stop from the end of September.
This leaves the airline with just 29 domestic routes, most of which are state-subsidized services to unpopular destinations, while its international network numbers no more than just five routes, although there was no word on whether the airline itself might soon shut.
When Olympic Air started operating in 2009 as the heir to Olympic Airways, it had 33 routes in Greece but 17 internationally, and at one time included New York and Boston, two hubs of the Diaspora.
The company’s statement announcing a halt to its main domestic services said it was a necessary move toward the “rationalization” of its flight schedule, which “is necessary in order for the company to strengthen its effort to improve its finances and continue to operate.”
Officials said the services might resume, stating: “If in the near future it appears through a change to market conditions that from the reduction or the termination of the flights the existing demand for air transport services is not satisfied, Olympic Air may revise its decisions,” while attributing the solution of reducing its network to the drop in demand.
MIG, itself dealing with difficulties in its banking division, bought Olympic’s logo and flight activity in 2009 for 177.2 million euros, ($233.6 million) including the technical base and ground-handling services.
Along with the reduction of its network, Olympic has also reduced the number of aircraft that the company operates, as from the 32 it had in October 2009 it now operates just 16. In May it also shut down Olympic Engineering, its technical base.