Cyprus Mail
Business

CY hopes to see profits in 2014

By Cosntantinos Psillides

CYPRUS Airways (CY) does not require further state aid, chairman Tony Antoniou said on Saturday after a meeting with technocrats from the troika of lenders.

Troika representatives are currently visiting Cyprus as a part of the island’s latest review following the bailout last March.

Antoniou also said the cash-strapped company might post profits for 2014. The national carrier posted losses of €55.8m for 2012, doubling its 2011 losses of €23.9m.

The CY chairman clarified that the issue of the company bouncing back would be clearer on Monday following a meeting of the ministerial committee appointed by the cabinet to address the dire financial situation of the national carrier.

The committee consists of Antoniou, Energy Minister Giorgos Lakkotripis, Finance Minister Harris Georgiades and Auditor -general Chrystalla Georghadji.

According to Antoniou, the committee will discuss possible strategic investors and also come up with a back-up plan in case the scheme to restructure the company isn’t approved by the EU Commission.

In March the European Commission said it was looking into whether Cyprus authorities were acting within EU law when they gave CY over €100 million, via a €73million rescue loan in December 2012, and a €31.3 million contribution to a capital increase in early 2013.

Authorities were told they could give CY no more state aid without prior approval.

The latest rescue plan provides for cutting the CY fleet from eleven aircraft to six A320 planes, one of which will be used as back-up, and calls for salary cuts and laying off 490 of the 1,040 people employed by the carrier.

Decision on both matters is expected within the year. It was supposed to be issued late 2013 but the Commission asked the CY bosses to file an amended restructuring plan, which they did in July 2013. If the Commission orders the company to return the money to the state, according to Antoniou, it would spell the end of Cyprus Airways as a state carrier, and the airline would have to be fully privatised.

CY was dealt a sever blow in January, when an almost done deal to sell a lucrative Heathrow Airport time slot to Qatar Airways fell through. The money was going to be used to provide the company with much needed liquidity for the summer of 2014.

The price was set at around €15 million but negotiations stopped after the national carrier was accused of violating a strict confidentiality clause by leaking information to the press.

Subsequently, another company offered a lower bid to Qatar Airways who promptly ditched CY. Qatar Airways and an aviation consulting company which was mediating the deal issued a scolding to Cyprus Airways, accusing them of violating the confidentiality clause, noting that the national carrier’s credibility was questionable.

 

 


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