Official complaint to the European Commission

Aviation

Official complaint to the European Commission

CIEL Airlines complains to EU

Monday, October 27, 2008

Greek CIEL Airlines send an official complaint to the European Commission referring to the recent decisions of the Hellenic Government regarding the turbulent Hellenic air-transportation system and growth.

The company's letter

"It has decided to dissolve Olympic Airlines (OA) and its sister companies (handling, cargo, maintenance and other) after its failure to convince international investors to invest in to the down-falling airline and the nascent Hellenic Aviation System. It has suggested a new airline, called Pantheon Airways. Pantheon is a start up airline created and supported financially by the Hellenic Ministry of Finance.

The Issue
The government was aware about the existence of other young companies such as Ciel Airlines S.A. (Memorandum and Articles 30.03.2005), with an interest and an investment on the aviation industry. Ciel has created and handed over to the Hellenic Government (Ministries of: Transportation, Finance and Economics) a series of proposals (since 12.12.2004). Ciel has never received an adequate reply or answer from the administration1.

The government excludes and ignores all the rest airline companies and market proposals by silent replies, vague suggestions, distribution of non accurate information and by using a “softy-softy” approach in order to, deny any other professional or company would wish or like to enter the market.

The government does not allow to other airlines to absorb (by using any available legal subsidy) OA’s released-to-be and unemployed-to-be fully trained personnel, by stating that airlines are excluded from governmental subsidy because the state controllers are not able to check the personnel when they fly from A to B2. At the same time the same government has supported in the past OA, and it is still doing it, and supports financially Pantheon in order to absorb 2500 people from OA, act which is infringing the articles 81 and 82 of the EC Treaty, it abuses the safety and security ideal and is conflicting with international aviation regulations about on-board personnel.

According to the Governmental plans:
The newcomer will absorb approximately 2500 professionals from OA, creating approximately 4000 unemployed. The day after OA’s dissolution, Pantheon will absorb the assets and the rights without touching the OA’s liabilities as well as its responsibilities.

The Problem
The Hellenic Government with its acts threatens the very essence of:
The bilateral agreements, the cultural as well as the trading relations between countries and companies with established interest on the healthy and competitive growth. With this approach is creating a barrier between the supply factors and the global demands on aviation related products due to bureaucracy and negative behaviour.

The governmental proposal places a brake on developments on the aviation system, which is so well linked with the Gross Domestic Product (GDP). Consequently the government puts a brake on the growth which is directly linked with the Hellenic capital contribution to the EC.

The Hellenic Government (today’s administration) creates once again a monopoly following the steps of the previous administration when it has created Olympic Airlines who took the assets of Olympic Airways. The Greeks have already paid the EU heavy fines.

This negative behaviour has an impact on the air transportation system as it delays growth on the land developments as well. Airports and infrastructures are not used because there is no opportunity for passengers, aviators, airlines and/or other companies to use them.

The Hellenic Government with its behaviour discourages newcomers such as CIEL AIRLINES S.A. (Ciel) as well as local or national investors and suppliers. The Government creates a negative profile internationally, therefore international investors will consider it twice before they will even think to invest and present new products and services.

The total governmental approach is conflicting with European and Global needs and trends which are influenced by deregulation and free market rules as well as aviation and trading alliances.

The Solution
If the Hellenic Government is keen to support directly or indirectly one airline then the government should consider seriously to support equally all the other airlines the start-ups as well as established ones, in this case Ciel can assure you that will accept the governmental support without complains.

Other Equally Strong Issues
1. The present situation does NOT give any opportunity or room for a decent company to plan and grow. Ciel is currently searching for strategic investors and alliances who face the market insecurities created by the government. The current situation discourages suppliers, increases the costs and influences trading contracts and turns away investors.
2. The Hellenic Aviation Environment lack of specific directives from the ministries involved with the aviation system3 regarding the key factors that stimulate the aviation market in Greece, element which creates even more insecurity, instability and threatens Ciel’s investment and the markets prosperity.
3. The end result is that the demand on travel and aviation driven products is declining due to lack of proper competition, lack of adequate and interesting products available, low productivity, low revenue passenger kilometres, high operating costs, expensive seat per kilometre, limited number of seats made available for sale per year, and limited and expensive location offered for leisure and business.

We do not wish to add more problems, as the matter of fact we would prefer to be a part of the solution. Ciel do not wish to adopt the negative behaviour to try to lower its costs in order to survive. We rather like to be creative and adopt the natural business behaviour of increasing its income and market share. Ciel sought for equal opportunities and standards.

Ciel could and would consider employing up to 950 professionals from all the profession categories when and if OA will be dissolved. Under the understanding that the government shows equally an interest and supports the OA personnel who may wish to continue to work as aviation-airline professionals. Ciel has an interest to create a transnational air network using as a base the Athens International Airport and as hubs other secondary Greek airports. Ciel has an interest to present to people with an interest to travel or to trade a series of new products tailored on their needs. Ciel welcomes the Hellenic and the European support and encouragement if and when it comes. Ciel is open to any suggestions, conversation and negotiation with the government, bodies, companies and investors who may consider investing on us. Ciel is presenting a new travel experience. The quality of its products and services will be the most generous return on any support of any kind that the company will receive, taking into consideration and in advance its synergies, its customers, its traveller’s interest and the market needs.

EU, help us to help you".