Barack Obama will visit Turkey next month, making what is likely to be his first appearance in a Muslim country since his inauguration as US president.
Hillary Clinton, the secretary of state, announced plans for the visit on Saturday in Ankara where, after meeting the prime minister, foreign minister and president, she launched a public charm offensive by appearing on a popular chat show.
Mr Obama made clear from his first day in office that he intended to reach out to the Muslim world where many critics saw the Bush administration’s “war on terror” as a war on Islam.
His choice of Turkey for a first visit signals the importance the US attaches to strengthening ties with a Nato ally that it may soon call on for help in its military exit from Iraq or greater support in Afghanistan.
But it also reflects his focus on engaging with Syria and Iran as he develops policy on the Middle East.
Turkey last year mediated between Syria and Israel in talks suspended because of the Gaza offensive that the US is keen to see revived. “The importance of this track, the peace effort, cannot be overstated,” Mrs Clinton said in a news conference with Ali Babacan, the Turkish foreign minister, who said Turkey would be willing to resume its role if invited to by both sides.
US officials this weekend held the highest-level talks with Syria in four years, as Mr Obama steps up efforts to improve ties with Bashar al-Assad’s government. Damascus has been accused of making trouble in Iraq, Lebanon and the Palestinian territories, backing anti-Israeli militant groups including Hamas and Hizbollah.
For its part, Syria appears to want the benefit of improved economic relations with Washington, which has imposed sanctions on Syria that have restricted development and investment.
“We found a lot of common ground,” said Jeffrey Feltman, the state department’s top official on the Middle East, after he and Dan Shapiro of the National Security Council met Walid Muallem, the Syrian foreign minister, on Saturday.
Mrs Clinton also suggested the US could seek to harness Ankara’s good relations with Tehran to help Mr Obama’s plan to engage the Islamic republic. “We’re going to require your help with Iran, especially in terms of affecting a change in Iran’s stance,” she said in an interview with local television.
The US has long hailed Turkey as a rare example of a secular democracy with a majority Muslim population, and Mrs Clinton ladled on the praise, saying the country showed that “democracy and modernity and Islam” could coexist and had a crucial role as a global leader.
But anti-American sentiment persists in Turkey, and one of the challenges will be to win round a public suspicious of the US. Mrs Clinton appeared on the chat show, hosted by four women, to field questions on her love life and joke about her fashion sense.
Monday, March 9, 2009
Saturday, March 7, 2009
Obama trip to Turkey within weeks
President Barack Obama will visit Turkey "in a month or so", US Secretary of State Hillary Clinton has said on a visit to Ankara.
She met Prime Minister Recep Tayyip Erdogan in the first visit by a member of the new US administration to Turkey.
Turkey's foreign minister said Ankara was ready to re-launch indirect talks between Syria and Israel.
Mrs Clinton said the importance of building relations between Israel and Syria could not be overstated.
Turkey was mediating those talks until recently, but Foreign Minister Ali Babacan said any request to resume that role must come from both sides.
"President Obama will be visiting Turkey within the next month or so," said Mrs Clinton, at a joint news conference with Mr Babacan. "The exact date will be announced shortly."
'Low perceptions'
The two allies would consult on the safest and most effective way to withdraw US forces from Iraq, she added.
Mr Obama is due to head for Europe next month to attend the G20 summit in London on 2 April.
Ankara has already indicated it will allow the US to use its territory and bases for the planned withdrawal of troops.
The war in Iraq was just one reason perception of the US plunged to a historic low in the major Muslim nation, says the BBC's Sarah Rainsford in Istanbul, and Mrs Clinton wants to reach out to that public.
In addition to her formal meetings, Mrs Clinton is making an appearance on a popular daytime chat show, hosted by four women.
It is the final stop of a week-long foreign tour by America's top diplomat.
Our correspondent says after a fraught relationship with the Bush administration, the visit is seen as a chance to reaffirm the two countries' alliance.
Turkey calls the US secretary of state's trip "important confirmation" of its strategic relationship with America.
Analysts in Turkey see the visit as a sign the Obama administration plans to revitalise its support for Turkey's EU accession efforts.
Our correspondent says Turkey is expected to try to ensure President Obama does not refer to the mass killing of Armenians in 1915 as genocide, in his speech on the anniversary of the forced deportations next month.
She met Prime Minister Recep Tayyip Erdogan in the first visit by a member of the new US administration to Turkey.
Turkey's foreign minister said Ankara was ready to re-launch indirect talks between Syria and Israel.
Mrs Clinton said the importance of building relations between Israel and Syria could not be overstated.
Turkey was mediating those talks until recently, but Foreign Minister Ali Babacan said any request to resume that role must come from both sides.
"President Obama will be visiting Turkey within the next month or so," said Mrs Clinton, at a joint news conference with Mr Babacan. "The exact date will be announced shortly."
'Low perceptions'
The two allies would consult on the safest and most effective way to withdraw US forces from Iraq, she added.
Mr Obama is due to head for Europe next month to attend the G20 summit in London on 2 April.
Ankara has already indicated it will allow the US to use its territory and bases for the planned withdrawal of troops.
The war in Iraq was just one reason perception of the US plunged to a historic low in the major Muslim nation, says the BBC's Sarah Rainsford in Istanbul, and Mrs Clinton wants to reach out to that public.
In addition to her formal meetings, Mrs Clinton is making an appearance on a popular daytime chat show, hosted by four women.
It is the final stop of a week-long foreign tour by America's top diplomat.
Our correspondent says after a fraught relationship with the Bush administration, the visit is seen as a chance to reaffirm the two countries' alliance.
Turkey calls the US secretary of state's trip "important confirmation" of its strategic relationship with America.
Analysts in Turkey see the visit as a sign the Obama administration plans to revitalise its support for Turkey's EU accession efforts.
Our correspondent says Turkey is expected to try to ensure President Obama does not refer to the mass killing of Armenians in 1915 as genocide, in his speech on the anniversary of the forced deportations next month.
Friday, March 6, 2009
Growing Turkish ire due to job and wage cuts
A man held a gun to his head and another to his chest outside the Turkish prime minister’s office on Monday in a dramatic protest over economic hardship.
It is not the first time Turks hit by economic crisis have turned to melodramatic means to bring their financial troubles to the government’s attention. But with violent protests breaking out in other recession-hit countries, Monday’s incident is a worrying sign for prime minister Recep Tayyip Erdogan as he tries to convince voters that Turkey can escape the worst effects of the global downturn.
So far, although trade unions have organised rallies to demonstrate against policies, the economic crisis has not sparked protests in Turkey on the scale of those seen in Greece, Russia or even the UK.
But tales of personal distress in Turkey – the gunman was a retired policeman protesting at his inability to pay off debts – are multiplying as the worldwide manufacturing slump forces Turkish companies to lay off workers or cut wages during halts in production.
The latest data showed unemployment above 12 per cent at the end of 2008, the highest in five years, and economists say these figures may understate the reality due to the scale of the unregistered economy. Banks are reporting rising numbers of small businesses and credit card borrowers unable to pay debts.
Economists worry the prime minister’s drive to win votes in next month’s local elections is undermining fiscal policy, noting that January’s cash budget deficit was almost six times bigger than a year earlier.
The government has announced a limited stimulus package that gives employers bigger subsidies to keep workers they would otherwise lay off, and includes tax breaks aimed at boosting car sales and encouraging investment in the poorer south-east. Further measures under consideration are rumoured to include direct payments to people on low incomes.
“We think the pace of easing in both monetary and fiscal policies is too rapid, and ignores a host of ... weaknesses that set Turkey apart from advanced economies,” said analysts at the consultancy Istanbul Analytics.
Mr Erdogan insists Turkey is a “safe haven” in comparison with some neighbours in eastern Europe and can afford to hold out in negotiations with the International Monetary Fund for a deal that does not impose unpopular conditions.
It is not the first time Turks hit by economic crisis have turned to melodramatic means to bring their financial troubles to the government’s attention. But with violent protests breaking out in other recession-hit countries, Monday’s incident is a worrying sign for prime minister Recep Tayyip Erdogan as he tries to convince voters that Turkey can escape the worst effects of the global downturn.
So far, although trade unions have organised rallies to demonstrate against policies, the economic crisis has not sparked protests in Turkey on the scale of those seen in Greece, Russia or even the UK.
But tales of personal distress in Turkey – the gunman was a retired policeman protesting at his inability to pay off debts – are multiplying as the worldwide manufacturing slump forces Turkish companies to lay off workers or cut wages during halts in production.
The latest data showed unemployment above 12 per cent at the end of 2008, the highest in five years, and economists say these figures may understate the reality due to the scale of the unregistered economy. Banks are reporting rising numbers of small businesses and credit card borrowers unable to pay debts.
Economists worry the prime minister’s drive to win votes in next month’s local elections is undermining fiscal policy, noting that January’s cash budget deficit was almost six times bigger than a year earlier.
The government has announced a limited stimulus package that gives employers bigger subsidies to keep workers they would otherwise lay off, and includes tax breaks aimed at boosting car sales and encouraging investment in the poorer south-east. Further measures under consideration are rumoured to include direct payments to people on low incomes.
“We think the pace of easing in both monetary and fiscal policies is too rapid, and ignores a host of ... weaknesses that set Turkey apart from advanced economies,” said analysts at the consultancy Istanbul Analytics.
Mr Erdogan insists Turkey is a “safe haven” in comparison with some neighbours in eastern Europe and can afford to hold out in negotiations with the International Monetary Fund for a deal that does not impose unpopular conditions.
Turkish lira hits six-year dollar low
he Turkish lira on Thursday hit a six-year low against the dollar as more analysts advised investors to cut exposure to Turkish assets or buy protection against sharper falls in the currency.
The lira fell to TL1.76 against the dollar, the lowest level since March 2003, before closing down 1.3 per cent at TL1.752. It has lost about 12 per cent of its value against the dollar since the start of the year.
Turkey’s financial system has proved more resilient than that of many neighbours in eastern Europe. But investors assumed interest rate cuts by the central bank would be supported by a new deal with the International Monetary Fund ensuring fiscal discipline.
Now worries are growing over the government’s reluctance to reach agreement with the IMF before local elections in March.
Barclays Capital advised its clients to buy protection against short-term weakness in the lira, saying markets had not fully priced in the risks of a recession as big as that of the 2001 crisis, significant fiscal deterioration and rejection of the IMF. “Turkey is less of a safe haven than some people believe,” said Christian Keller, economist at Barclays Capital, though he noted further lira weakness could “tilt” policymakers to reach an IMF deal.
Lars Rasmussen at Danske Bank also recommends reducing exposure to Turkish assets and Ulrich Leuchtmann, currency strategist at Commerzbank, said: “My recommendation would be to get rid of your Turkish lira.”
Local brokerage Expres Invest predicted Turkish gross domestic product would fall 4.5 per cent this year, and that a high budget deficit was now a bigger risk than Turkey’s current account deficit.
The lira is notoriously volatile, thanks to heavy short-term trading by domestic investors. It is vulnerable to sudden slides. One banker in Istanbul described it as “the most dangerous point in the Turkish economy”.
Chris Scicluna, economist at Daiwa Securities, was more upbeat, saying the lira could look “competitive” once the economy turned the corner. “I’m certainly not bullish, but there are reasons not to totally despair.”
The lira fell to TL1.76 against the dollar, the lowest level since March 2003, before closing down 1.3 per cent at TL1.752. It has lost about 12 per cent of its value against the dollar since the start of the year.
Turkey’s financial system has proved more resilient than that of many neighbours in eastern Europe. But investors assumed interest rate cuts by the central bank would be supported by a new deal with the International Monetary Fund ensuring fiscal discipline.
Now worries are growing over the government’s reluctance to reach agreement with the IMF before local elections in March.
Barclays Capital advised its clients to buy protection against short-term weakness in the lira, saying markets had not fully priced in the risks of a recession as big as that of the 2001 crisis, significant fiscal deterioration and rejection of the IMF. “Turkey is less of a safe haven than some people believe,” said Christian Keller, economist at Barclays Capital, though he noted further lira weakness could “tilt” policymakers to reach an IMF deal.
Lars Rasmussen at Danske Bank also recommends reducing exposure to Turkish assets and Ulrich Leuchtmann, currency strategist at Commerzbank, said: “My recommendation would be to get rid of your Turkish lira.”
Local brokerage Expres Invest predicted Turkish gross domestic product would fall 4.5 per cent this year, and that a high budget deficit was now a bigger risk than Turkey’s current account deficit.
The lira is notoriously volatile, thanks to heavy short-term trading by domestic investors. It is vulnerable to sudden slides. One banker in Istanbul described it as “the most dangerous point in the Turkish economy”.
Chris Scicluna, economist at Daiwa Securities, was more upbeat, saying the lira could look “competitive” once the economy turned the corner. “I’m certainly not bullish, but there are reasons not to totally despair.”
Crashed Turkish airline was on autopilot
The Turkish Airlines Boeing 737 that crashed at Amsterdam’s Schiphol airport last week, killing nine, was running on autopilot and stalled because a faulty altimeter prompted the plane to cut power to its engines, Dutch safety officials said on Wednesday.
The initial findings have prompted the Dutch Safety Board to issue a warning to Boeing to prevent faulty radio altimeters influencing the autopilot. But they also raised questions about the role of the pilots, who were among those killed.
Pieter van Vollenhoven, chairman of the safety board, said the use of autopilot when descending to land was common practice at Turkish Airlines although policies varied between carriers.
Data from the black box flight recorder showed that the left-hand of two radio altimeters that are used for precise altitude measurements when landing gave an erroneous reading of the plane’s height, telling the autopilot the plane was 8ft below sea level rather than 1,950ft above.
“This sudden change in altitude had a direct effect on the automatic throttle which controls engine power during the descent,” Mr van Vollenhoven told a news conference. “The aircraft reacted as if it was at a height of just a few metres above the runway by fully cutting engine power.”
The erroneous altitude reading triggered an automatic warning telling the pilots to deploy the plane’s undercarriage. The plane also lost speed. But the crew ignored both the warning and the loss of airspeed, Mr van Vollenhoven said.
Only when the control stick started to vibrate to signal that the plane had slowed to stalling speed did the pilots react by applying full power, by which time the plane was at 450ft.
“However this was too late for the plane to regain flight,” Mr van Vollenhoven said.
The black box, which had data from eight previous flights recorded on it, showed that the same error with the altimeter had occurred at least twice already.
Boeing has been asked to change the manual for Boeing 737s to forbid the use of autopilot and the automatic throttle during descent and landing if there is an error in the radio altimeters, Mr van Vollenhoven said. Boeing was also urged to investigate whether the same should apply during normal flight.
The safety board had found no other evidence of problems with the aircraft or irregularities during the flight, he said.
As well as the three pilots in the cockpit, one other crew member and five passengers were killed when the plane crashed one kilometre from the runway.
Turkish Airlines’ last fatal crash was in January 2003, when a domestic flight came down in fog when attempting to land at Diyarbakir, a city in the south-east of Turkey. It was the first fatal air accident at Schiphol since 1994.
The initial findings have prompted the Dutch Safety Board to issue a warning to Boeing to prevent faulty radio altimeters influencing the autopilot. But they also raised questions about the role of the pilots, who were among those killed.
Pieter van Vollenhoven, chairman of the safety board, said the use of autopilot when descending to land was common practice at Turkish Airlines although policies varied between carriers.
Data from the black box flight recorder showed that the left-hand of two radio altimeters that are used for precise altitude measurements when landing gave an erroneous reading of the plane’s height, telling the autopilot the plane was 8ft below sea level rather than 1,950ft above.
“This sudden change in altitude had a direct effect on the automatic throttle which controls engine power during the descent,” Mr van Vollenhoven told a news conference. “The aircraft reacted as if it was at a height of just a few metres above the runway by fully cutting engine power.”
The erroneous altitude reading triggered an automatic warning telling the pilots to deploy the plane’s undercarriage. The plane also lost speed. But the crew ignored both the warning and the loss of airspeed, Mr van Vollenhoven said.
Only when the control stick started to vibrate to signal that the plane had slowed to stalling speed did the pilots react by applying full power, by which time the plane was at 450ft.
“However this was too late for the plane to regain flight,” Mr van Vollenhoven said.
The black box, which had data from eight previous flights recorded on it, showed that the same error with the altimeter had occurred at least twice already.
Boeing has been asked to change the manual for Boeing 737s to forbid the use of autopilot and the automatic throttle during descent and landing if there is an error in the radio altimeters, Mr van Vollenhoven said. Boeing was also urged to investigate whether the same should apply during normal flight.
The safety board had found no other evidence of problems with the aircraft or irregularities during the flight, he said.
As well as the three pilots in the cockpit, one other crew member and five passengers were killed when the plane crashed one kilometre from the runway.
Turkish Airlines’ last fatal crash was in January 2003, when a domestic flight came down in fog when attempting to land at Diyarbakir, a city in the south-east of Turkey. It was the first fatal air accident at Schiphol since 1994.
‘Genocide’ law threatens US ties with Turkey
The US Congress is renewing a push on legislation that Turkey has warned could devastate Washington’s ties with one of its staunchest Nato allies.
Sponsors of a resolution branding the Ottoman empire’s 1915-1923 massacres of Armenians as genocide have begun gathering backers for the measure, which has long been supported by Barack Obama, US president.
Ankara, which has frequently warned that the legislation could endanger both Turkish-US and Turkish-Armenian relations, halted an attempt to pass the legislation in 2007 after calling into question US use of its Incirlik airbase.
Mr Obama is confronted with a choice between breaking a campaign pledge or risking long-standing defence ties with a strategic ally.
Ali Babacan, Turkish foreign minister, said this week that Ankara would take a “positive” approach if Washington asked for help in its exit from Iraq. The US also wants more assistance from Turkey in Afghanistan. A Turkish delegation is in Washington to hammer home the message that the genocide resolution is “unacceptable” and would inflame public opinion.
Turkey’s leaders are expected to raise the issue with Hillary Clinton, US secretary of state, when she visits Ankara on Saturday. They are likely to argue that passing the resolution would also derail a drive to mend relations between Turkey and Armenia, including moves to open the border. Mr Babacan says settlement is closer than at any point since 1915.
Members of Congress say US frustration with recent Turkish behaviour raises the chances of the resolution going through. In particular, the denunciation by Recep Tayyip Erdogan, Turkey’s prime minister, of Israel’s Gaza offensive has angered Jewish and pro-Israel groups that supported Turkey behind the scenes in 2007.
Mr Obama promised during his election campaign “to recognise the Armenian genocide” were he to become president – a step that would have more impact than the House of Representatives’ resolution.
A key moment will come on April 24, the official day of remembrance, which in previous years has seen former presidents Bill Clinton and George W. Bush refer respectively to “the deportations and massacres” and the “annihilation” of 1.5m Armenians.
But congressional backers of the resolution say they will formally introduce it before then.
“I don’t think it serves our interests well to be complicit in Turkish denial of something that is historical fact,” said Adam Schiff, a Democratic member of the House and one of the measure’s chief sponsors.
Turkey denies systematic killings, and maintains thousands of Turks also died during the violent disintegration of the Ottoman empire.
The US state department has always fought the resolution, fearing its impact on relations with Turkey.
Discussing the 1915 massacres is no longer the taboo it once was in Turkey, but the “G-word”, as Turkish diplomats refer to it, still provokes official outrage and a visceral reaction from nationalists.
A foreign ministry spokesman said Turkey expected “third parties” to avoid making talks with Armenia more difficult, but added: “There are no assurances in life.”
Mark Stephen Kirk, a Republican backer of the resolution who denounces the use of millions of dollars of Turkish “taxpayers’ money” for “foreign lobbyists” fighting the measure, says the Incirlik base is less important now that the Obama administration plans to keep up to 50,000 troops in Iraq until the end of 2011.
But the administration says Incirlik is still significant for operations in Iraq – while acknowledging it has yet to make up its mind on the genocide resolution.
“Incirlik airbase has all the time been an important transit hub,” says a senior state department official. But his comments on the genocide resolution were much more cautious than the Bush administration’s admonitions against it.
Sponsors of a resolution branding the Ottoman empire’s 1915-1923 massacres of Armenians as genocide have begun gathering backers for the measure, which has long been supported by Barack Obama, US president.
Ankara, which has frequently warned that the legislation could endanger both Turkish-US and Turkish-Armenian relations, halted an attempt to pass the legislation in 2007 after calling into question US use of its Incirlik airbase.
Mr Obama is confronted with a choice between breaking a campaign pledge or risking long-standing defence ties with a strategic ally.
Ali Babacan, Turkish foreign minister, said this week that Ankara would take a “positive” approach if Washington asked for help in its exit from Iraq. The US also wants more assistance from Turkey in Afghanistan. A Turkish delegation is in Washington to hammer home the message that the genocide resolution is “unacceptable” and would inflame public opinion.
Turkey’s leaders are expected to raise the issue with Hillary Clinton, US secretary of state, when she visits Ankara on Saturday. They are likely to argue that passing the resolution would also derail a drive to mend relations between Turkey and Armenia, including moves to open the border. Mr Babacan says settlement is closer than at any point since 1915.
Members of Congress say US frustration with recent Turkish behaviour raises the chances of the resolution going through. In particular, the denunciation by Recep Tayyip Erdogan, Turkey’s prime minister, of Israel’s Gaza offensive has angered Jewish and pro-Israel groups that supported Turkey behind the scenes in 2007.
Mr Obama promised during his election campaign “to recognise the Armenian genocide” were he to become president – a step that would have more impact than the House of Representatives’ resolution.
A key moment will come on April 24, the official day of remembrance, which in previous years has seen former presidents Bill Clinton and George W. Bush refer respectively to “the deportations and massacres” and the “annihilation” of 1.5m Armenians.
But congressional backers of the resolution say they will formally introduce it before then.
“I don’t think it serves our interests well to be complicit in Turkish denial of something that is historical fact,” said Adam Schiff, a Democratic member of the House and one of the measure’s chief sponsors.
Turkey denies systematic killings, and maintains thousands of Turks also died during the violent disintegration of the Ottoman empire.
The US state department has always fought the resolution, fearing its impact on relations with Turkey.
Discussing the 1915 massacres is no longer the taboo it once was in Turkey, but the “G-word”, as Turkish diplomats refer to it, still provokes official outrage and a visceral reaction from nationalists.
A foreign ministry spokesman said Turkey expected “third parties” to avoid making talks with Armenia more difficult, but added: “There are no assurances in life.”
Mark Stephen Kirk, a Republican backer of the resolution who denounces the use of millions of dollars of Turkish “taxpayers’ money” for “foreign lobbyists” fighting the measure, says the Incirlik base is less important now that the Obama administration plans to keep up to 50,000 troops in Iraq until the end of 2011.
But the administration says Incirlik is still significant for operations in Iraq – while acknowledging it has yet to make up its mind on the genocide resolution.
“Incirlik airbase has all the time been an important transit hub,” says a senior state department official. But his comments on the genocide resolution were much more cautious than the Bush administration’s admonitions against it.
Aegean bids to acquire Olympic
Aegean Airlines, the Athens-listed Greek carrier, on Wednesday launched a €170m takeover bid for the troubled state-owned Olympic Airlines.
Aegean, which was formed in 1999 and last year carried more passengers than the Greek flag carrier for the first time, said it was seeking to develop a Greek airline with the “necessary critical size, strength and capability” to face competition in the single European market.
The acquisition would take it for the first time into long-haul markets with Olympic flying routes to the US, Canada, the Middle East and South Africa.
Aegean is competing against a rival bid from Greece’s Marfin Investment Group, led by Andreas Vgenopoulos, a flamboyant local entrepreneur, which started negotiations with the Greek government last month after an international tender collapsed.
The European Commission last year opened the way for Olympic’s privatisation by approving the write-off of more than €2.6bn in accumulated debt. It also suspended court action over the repayment of €850m in state aid.
Aegean said it was committed to taking over the operation within 60 days of signing an agreement with the government, which would save the state from hundreds of millions of euros of further operating losses, which would be incurred if the transaction was delayed.
It sought to allay competion fears and said it was ready to give up to rivals part of the operations of the enlarged group in the domestic Greek market.
It said the proposed merger of the two groups was a response to the growing wave of airline consolidation in Europe and was aimed at safeguarding “the long-term provision of competitive high-quality services from a Greek-based and owned airline”.
The two carriers combined would only account for 17 per cent of the total international traffic to and from Greece, with international flights accounting for 80 per cent of total Greek traffic.
The merged group would still be far less dominant than the main national carrier in most European markets, it said.
Aegean is hoping that the recent merger of Alitalia and Air One in Italy will provide support with the competition authorities for its own deal in Greece.
It carried 6m passengers last year and is in the midst of a $1.2bn four-year expansion programme to renew and expand its fleet with orders for 27 Airbus 320 family short-haul jets.
Marfin, an investment holding group listed on the Athens stock exchange, said last month it was committed to investing at least €200m to acquire Olympic and to restructure its operations.
It was the only group that responded to the government’s last-ditch call for a private Greek investor to rescue the airline, which has been losing an estimated €2m a day.
The government has set a minimum price of €110m for Olympic based on an independent valuation of its assets. It is keen to reach a deal quickly so that services can be upgraded by the start of the tourist season in April.
Marfin has cash reserves of €1.2bn following the sale last year of its minority stake in Hellenic Telecoms, the public operator, to Deutsche Telekom.
Aegean, which was formed in 1999 and last year carried more passengers than the Greek flag carrier for the first time, said it was seeking to develop a Greek airline with the “necessary critical size, strength and capability” to face competition in the single European market.
The acquisition would take it for the first time into long-haul markets with Olympic flying routes to the US, Canada, the Middle East and South Africa.
Aegean is competing against a rival bid from Greece’s Marfin Investment Group, led by Andreas Vgenopoulos, a flamboyant local entrepreneur, which started negotiations with the Greek government last month after an international tender collapsed.
The European Commission last year opened the way for Olympic’s privatisation by approving the write-off of more than €2.6bn in accumulated debt. It also suspended court action over the repayment of €850m in state aid.
Aegean said it was committed to taking over the operation within 60 days of signing an agreement with the government, which would save the state from hundreds of millions of euros of further operating losses, which would be incurred if the transaction was delayed.
It sought to allay competion fears and said it was ready to give up to rivals part of the operations of the enlarged group in the domestic Greek market.
It said the proposed merger of the two groups was a response to the growing wave of airline consolidation in Europe and was aimed at safeguarding “the long-term provision of competitive high-quality services from a Greek-based and owned airline”.
The two carriers combined would only account for 17 per cent of the total international traffic to and from Greece, with international flights accounting for 80 per cent of total Greek traffic.
The merged group would still be far less dominant than the main national carrier in most European markets, it said.
Aegean is hoping that the recent merger of Alitalia and Air One in Italy will provide support with the competition authorities for its own deal in Greece.
It carried 6m passengers last year and is in the midst of a $1.2bn four-year expansion programme to renew and expand its fleet with orders for 27 Airbus 320 family short-haul jets.
Marfin, an investment holding group listed on the Athens stock exchange, said last month it was committed to investing at least €200m to acquire Olympic and to restructure its operations.
It was the only group that responded to the government’s last-ditch call for a private Greek investor to rescue the airline, which has been losing an estimated €2m a day.
The government has set a minimum price of €110m for Olympic based on an independent valuation of its assets. It is keen to reach a deal quickly so that services can be upgraded by the start of the tourist season in April.
Marfin has cash reserves of €1.2bn following the sale last year of its minority stake in Hellenic Telecoms, the public operator, to Deutsche Telekom.
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