Money is not the only factor that will be taken into consideration when deciding on who would be the strategic investor for Cyprus Airways (CY), Communication and Works minister Marios Demetriades said on Tuesday, adding the future investor’s plan for the company is of more importance.
The minister said the government is concerned not just with selling the company to the highest bidder but also to secure long term growth for the national carrier.
“A company might offer more money but have a limited growth plan while another investor’s proposal might include a better plan. We want to do what is best for the people and the company in the long run,” Demetriades said, adding the government doesn’t expect to sort out CY’s financial woes just by the money secured in the deal.
Asked whether the investors’ proposals will be affected by an upcoming European Commission ruling on whether CY violated trade practices by accepting government aid, Demetriades said it is still unclear when that will be. “We are waiting for the new Commissioner to be appointed,” explained Demetriades.
Nine companies have submitted non-binding proposals for the acquisition of CY, including Ryanair and Aegean Air.
The state, which owns more than 90 per cent of CY, invited companies to submit expressions of interest in July. The loss-making airline has struggled to survive against cheaper competitors for years despite several attempts at a turnaround.
The airline is under scrutiny from the European Commission, which is investigating the terms of a €73 million rescue package in 2012 and a €31.3 million capital increase in early 2013 to establish whether they violated state aid rules.
The EU rules permit a government to provide rescue and restructuring aid to a company in difficulty once over a period of 10 years. Cyprus Airways previously received government aid in 2007.