Aviation

When global distribution system and travel e-commerce provider Worldspan opened its new full-service branch office in Thessaloniki, it was but a first step in investment plans for the Greek market. Additional investment plans for Greece are imperative in order to build market share and deliver more technology innovation to the Greek travel industry, says the local Worldspan office.

Greece’s government, in late December, announced measures to lower costs for the airline industry. It said this should help fortify the sector, which suffers more than most economic sectors after the September 11 terrorist attacks against the U.S. The attack continues to deter the public worldwide from traveling at the rate it did prior to the terrorist attack.

Olympic’s domestic subsidiary carrier, Olympic Aviation, gets some 10.3 million euros (3.5 billion drachmas) annually in government subsidies for operating flights to nine island destinations considered highly unprofitable.

The European Commission last month tabled a proposal that, if adopted, would oblige airlines to pay a hefty sum to passengers forced to miss their flights either through overbooking or cancellation.

Some 18 sales representatives from local SkyTeam offices – Air France, Aeromexico, Alitalia, CSA Czech Airlines, Delta and Korean Air – called on 75 travel agencies in Athens and Thessaloniki during a recent short 3-week period. They presented the four new “Around the World Tour” products created by the airline alliance, as well as its newest member, Alitalia.

Airport ground handling companies here in Greece now suffer the same financial blows felt by airlines after the New York terrorism attack. Airlines, in an dire attempt to cut costs wherever possible, have made life unbearable for some independent companies, not least of which are Greece’s three ground handling companies formed after Olympic Airways lost its monopoly on the sector.

Axon Airlines, which was bidding to buy national carrier Olympic Airways, announced the suspension of operations on November 30, citing an industry downturn and rising losses in the wake of the September 11 attacks on the United States.

Either through a Greek subsidiary airline or through an alliance with a private Greek carrier, Cyprus Airways is about to take on Olympic Airways. The Cypriot flag carrier says it will concentrate on international flights out of Greece and perhaps team up with a private Greek carrier for the Greek domestic market. The project is reported to be at an advanced stage and should be concluded soon.

Greece’s travel trade associations got together last month ans called emergency general assembly of all travel associations to consider stop selling domestic airline tickets after local carriers cut agency commission down to 6.94% from 9%.

High insurance fees and low revenue have forced Greek airlines to increase fares. At the same time, they want major decreases in airport fees and taxes. And so far, they have managed to get all of the tourism-related associations in the private sector behind them in a strong request to abolish the country’s airport tax, or ‘spatossimo.’