Cyprus Mail
Cyprus

Minister rejects Ryanair prediction that Aegean would win CY bid

By Constantinos Psillides

Communications and Works Minister Marios Demetriades has rejected comments by Ryanair boss Michael O’Leary who said he thought Aegean was more likely to succeed in its bid for Cyprus Airways (CY).

Responding to a question on Wednesday regarding Ryanair’s own bid to acquire Cyprus Airways, O’Leary was quoted saying that “on balance it’s more likely to go to Greece, but we’ll make it difficult for them by offering very rapid growth.”

O’Leary was referring to Aegean Airlines, the only Greek company that was interested in Cyprus Airways and Ryanair’s major competitor in acquiring Cyprus’ national carrier.

But Demetriades said this was not necessarily the case.

“This is a non-existent issue. The government hasn’t decided beforehand on who will win the bid for Cyprus Airways. We, as ministers, don’t even take part in the specialised committee set up to deal with the process. The committee handles every aspect of the procedure, which will soon be concluded,” said Demetriades, adding that he was briefed by the committee on Wednesday on the progress made. “We are nearing the final stage. This is not an easy process,” he said.

Demetriades told reporters on Tuesday that the committee was evaluating all proposals and that when deciding on which company would take hold of CY, a long-term growth strategy was far more important than the size of the bid.

Nine companies have submitted non-binding proposals for the acquisition of CY, including Ryanair and Aegean. Ryanair aims to set up hub to serve the Middle East but O’Leary said he thought Aegean would use the airline to feed more traffic to Athens.

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.

 

 

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