NICOSIA: Near-bankrupt national carrier Cyprus Airways will be kept operational for now but it must undergo drastic restructuring to ensure its immediate future, the government said yesterday.
Government spokesman Christos Stylianides said the state-owned airline would be kept going through the summer so as not to leave tens of thousands of tourists who have pre-booked holidays on the Mediterranean island in the lurch.
With Cyprus reeling from the devastating terms of a eurozone debt bailout that crippled its once lucrative financial sector and ushered in years of austerity and a sharp recession, tourism is the island’s main hope of light at the end of the tunnel.
“The cabinet today decided, for very specific reasons, mainly relating to the summer tourism season, that it would be desirable to keep the company alive,” Stylianides told reporters.
“So as to complete the summer season with the aim of finding a buyer-strategic investor as soon as possible.” Stylianides said the cabinet decision was conditional on management and trade unions swiftly agreeing on the “necessary restructuring and downsizing” of the airline. The spokesman described the airline’s current plight as “very difficult and fragile”.
According to trade union estimates, the company has pre-sold 400,000 seats for the summer holiday season.
State radio said the preferred downsizing scenario was for the 1,030-strong workforce to be reduced by at least half to around 500 and its 11 Airbus fleet reduced to six plus one in reserve.
It said that a potential Lebanese strategic investor was expected to arrive for talks next week.
The cabinet decision came as some 300 Cyprus Airways staff protested outside the presidential palace chanting: “No unemployment,” and: “Don’t destroy Cyprus Airways.” The struggling airline posted a loss of ¤55.8m after tax for 2012, more than double the net loss of ¤23.88 for the previous year.
AFP
