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CY staff protest as state talks to bidders

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By Angelos Anastasiou

CYPRUS Airways (CY) employees took to the streets yesterday in fear for their future, just as the technical committee for the state-owned airline met with representatives from the two airlines – Aegean Airlines and Ryanair – interested in acquiring the flailing national carrier.

The protesters gathered outside the offices of KPMG, consultants to CY and members of the technical committee, early in the morning, before moving to the Finance ministry, where the committee met with Ryanair reps.

Holding banners that read “no more workers in unemployment”, “shutting down Cyprus Airways=1,000 new unemployed” and “we demand to have our Provident Fund secured”, the employees requested an audience with Finance minister Harris Georgiades but were turned down, igniting tensions among the crowd.

CY’s future remains in limbo ahead of a European Commission decision on whether amounts in excess of €100m given to the airline by the government in recent years constitutes state aid – forbidden by EU competition law – and must be paid back, a decision that would instantly trigger the company’s insolvency.

For fear of such a decision, the government has liquidated most of the company’s assets.

A consistently loss-making entity even before Cyprus’ 2004 accession to the EU, when protectionism was no longer an option, the company managed to stay afloat via a series of cash injections from taxpayer money.

But that is no longer an option, and the government is seeking to sell the airline to anyone who would buy it.

Aegean and Ryanair, the only two to have expressed serious interest, have reportedly tabled offers deemed very low.

Protesting employees are trying to prevent the sale for fear that the new owner might not recognise their employment status and rights under the current regime.

Various union reps have expressed employees’ explicit intent to try and block efforts to sell the airline.

According to the Cyprus News Agency, employees stressed the need for Cyprus to keep its national carrier, instead of selling it to a foreign company.

They also claimed that the €100m in losses that the company has accumulated over the years were the result of mismanagement by governments and politicians, and were not the fault of the employees who are being victimised.

In an interview given to the state broadcaster, President Nicos Anastasiades said he would be all for having a national carrier if its existence would not infringe on taxpayers’ best interest.

“Who wouldn’t want his country to have a national carrier,” Anastasiades said. “But at the same time, we must factor in the cost to the taxpayer of keeping a loss-making entity operational.

The president was less than diplomatic when asked to remark on comments made by Christos Petrou, his own aviation consultant, on Thursday. Petrou had publicly criticised the government for relying solely on non-aviation experts for the handling of the Cyprus Airways issue.

“Consultant on aviation – not airlines,” Anastasiades pointed out with regard to Petrou’s duties. “He overstepped the terms of his mandate, because Mr Petrou is an excellent expert in matters of civil aviation, but I do not consider him my consultant on Cyprus Airways – as he is fully aware.”

Pilots’ union PASYPI issued a statement yesterday, following the other unions in blaming politicians for driving CY to the ground, while also claiming that the state stands to lose €302m if the airline shuts down.

The pilots claim that the state will lose the €100m granted as state aid, €20m in redundancy payments to staff, €3.5m in unemployment benefits and €2.5m from income tax paid by the staff.

PASYPI also claims that the state stands to lose from CY’s rent and fees paid to Hermes Airports, the international consortium that manages Larnaca and Paphos airports. Specifically, CY pays Hermes €12m in rent for office buildings annually and €10m in parking and landing fees.

The pilots union also included in their list a further €20m in airport taxes paid by passengers to Hermes.

They also claimed that one of the companies interested in CY asked for a clause stipulating that they should receive a €40 subsidy for each passenger.

“The company stated that they would bring 3 million passengers each year. So that’s an added €120m.”

The pilots estimate a further €9m paid to travel agencies employees who would be out of a job, and €4m more stemming from a deal they said the state made with Hermes regarding the Ercan airport in the north. The pilots claimed that, to offset loss of income, the state agreed to pay Hermes €40 for every passenger that travels through Ercan.

A representative from Hermes was not available for comment.

“If the minister can pay all this out of his own pocket then he is free to shut down CY if he so wishes,” concluded the statement.

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