By Constantinos Psillides
FORMER national carrier Cyprus Airways (CY) boosted its staff number by 71 per cent in the 1980s, as a result of pressure by political parties and the government, according to the findings of A parliamentary ad hoc committee set up to investigate the reasons that led to CY’s downfall.
CY’s legal adviser Polys Polyviou, who was testifying over the period in question, said that the company’s high payroll kept it from ever being competitive, especially after chartered airlines started operations. He noted that from 1981 to 1989 the company went from employing 974 people to 1,600, almost doubling the staff.
Polyviou attributed the extensive hiring to party and government influences, stating that the company’s management wanted to make CY competitive but couldn’t.
Despite the many problems, Polyviou told MPs that the steady leadership of Stavros Galatariotis benefited the company but that some of the decisions made – expanding the fleet by buying more aircraft and the government acquiring a 20 percent share held by British Airways – had irrevocable implications on the airline.
“The decisions made by the company and the government shaped Cyprus Airways’ future,” said Polyviou.
Acting on his remarks, the ad hoc committee decided to write to both Airbus and Boeing to enquire on who represented the companies in their talks with CY or if they acted through middlemen.
Polyviou presented the committee with Galatariotis’ resignation letter, sent to former president Giorge Vasiliou in 1989. Galatariotis claimed that CY could not compete with chartered airlines and criticised the Labour ministry for a number of decisions that increased the company’s labour costs.
Yiorgos Spyrou, who at the time acted as an in-house legal advisor, was also present at the meeting. Spyrou said that CY employees had demanded to be on the same pay scale as their European peers.
Spyrou noted that all CY’s problems came to the surface after Cyprus joined the EU.
The legal advisor revealed that the national carrier went from a CYP 29 mln turnover in 1981 to a 69 mln turnover by 1989.
“The company’s main shareholder, the government, should have made it clear whether the increase in turnover aimed at making the company profitable or if they had something else in mind,” said Spyrou.
Cyprus Airways was grounded in January this year, after the EU Commission issued a ruling ordering the company to return some €66 mln it had received in state aid in 2012.