By Peter Stevenson
CYPRUS Airways’ (CY) new board does not have the money to pay for redundancies and will be unable to raise the money by selling off designated time slots according to new chairman, Antonis Antoniou.
The government had suggested selling off its time slots at various airports, including Heathrow to raise funds to compensate redundant employees but Antoniou told the state broadcaster yesterday the money raised would not suffice.
“Unfortunately the times slots are not worth much at the moment and they cannot fill the gaps which the government is looking to fill financially so we have reached a dead end,” Antoniou said.
A new strategic investor needs to be found to save the company, but by selling off the time slots, Antoniou said he believes the move would essentially be pushing the company towards liquidation.
“I didn’t become chairman in order to liquidate the company but to make it profitable again,” he said, adding “the trade unions told me that they do not want to sell of the time slots as it would mean the end of Cyprus Airways as we know it”.
Antoniou explained that by selling them off, not enough money could be gathered to raise enough funds to pay for the redundancies and even if they were, CY would still think twice about selling them off.
He revealed the board had met for a third time with trade unions on Friday and fully informed them about the new board’s rescue plan.
“We have made it clear that any employee who is being made redundant needs to receive the money they have paid into their provident funds,” he said.
He added that he believed that despite many difficulties, the government was on the right track with regards to redundancies and provident funds.
“We are experiencing an unprecedented situation and Cyprus Airways is losing thousands of euros as each day passes because of the redundancies which need to be paid out,” Antoniou said.
Trade unionist, Antonis Neophytou from PEO told the state broadcaster yesterday that an agreement was made by the state with the unions on April 12 to compensate the personnel but no payment has been made yet, he said.
He added that part of the agreement would see all employees who leave the company receiving their provident funds as soon as they are made redundant. “Former employees will start receiving compensation from January 1, 2014,” Neophytou concluded.
The Cabinet had recently named a new board of directors at the end of May after the previous board all resigned.
They had handed in their resignation en masse in protest against the decision in April to allocate around €20 million of company funds to compensate staff made redundant as part of a last-ditch effort to save the airline from closure.
The sum agreed between the government, board and airline unions last month was 50 per cent of the compensation package offered by the company in its last redundancy plan.