Greece is talking with Olympic Investors-York Capital on the sale of ailing flagship carrier Olympic Airlines, the country's finance ministry said late on Tuesday.

"After a proposal by the government's financial and legal advisers, the inter-ministerial committee on privatizations asked that talks on Olympic Airlines continue, first with the Olympic Investors-York Capital scheme," a finance ministry statement said.

It did not provide further details of Olympic Investors. Lazard, along with National Bank, Alpha Finance and Emporiki Investment Bank, is advising the government on the privatization.

Greece, which is trying to sell Olympic Airlines as part of a EUR1.6 billion (USD$1.94 billion) state divestments agenda to pay down public debt, had said in May it was holding talks with three bidders for the loss-making carrier without naming them.

The country's transport minister has said the sale is the carrier's last chance for survival.

The sale also involves Olympic's subsidiaries in ground handling and aircraft servicing.