Cyprus Mail
Cyprus

‘Cyprus Airways isn’t far from closure’

By Marie Kambas

Cyprus Airways could face imminent closure after the holidays if it fails to produce a credible restructuring programme and prove its financial viability to the government, Kathimerini newspaper reported.

Alecos Michaelides, permanent secretary at the ministry of communications and works and also chairman of the Air Licensing Authority, warned Cyprus Airways in correspondence dated December 5 that its operating licence was at stake.

The airline must by January 8 present fully audited 2014 results to authorities, and provide evidence that it is a going concern for it to be allowed to continue to operate, Phileleftheros said in an unsourced report.

There was no immediate reaction from authorities. However government spokesman Nicos Christodoulides said it had no knowledge that the European Commission was about to pull the plug on the airline.

It has previously been widely reported that the European Commission is likely to rule as illegal state aid Cyprus Airways received from the government in 2011 and 2012 and demand it be repaid, a move which will push the cash-starved airline to bankruptcy.

It is also under scrutiny by the European Commission, which is investigating the terms of a €73 million euro 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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