Cyprus Mail
Cyprus

‘Eurocypria should have been allowed to go on’

Kikis Lazarides

By Constantinos Psillides

If low-cost subsidiary Eurocypria had been allowed to operate, it could have been a viable substitute for Cyprus Airways (CY) former chairman of the defunct national carrier chairman Kikis Lazarides said on Wednesday.

Speaking before the ad hoc parliamentary committee set up to investigate the reasons behind CY’s demise, Lazarides defended his decision to push for a low cost airline back in 1992, arguing that charter airlines would be the future and that the business model Eurocypria operated from made the company more competitive.

Lazarides, who was chairman from 1989 to 1993 and again from 2004 to 2010, said that during its first nine months of operations Eurocypria made a profit of €2.1 million while the following year revenue was up by €540,000.

“Charter airlines were just coming into the market in 1992. Cyprus Airways had a large fleet of nine Airbus planes that weren’t properly utilised. Even if Cyprus Airways went bankrupt, Eurocypria could step in and take over,” he said.

Lazarides said when he left the company went in a different direction, stressing that Eurocypria never benefited from Cyprus Airways in any way.

Eurocypria began operating in 1992 and shut down in 2010 amidst accusations of mismanagement. Despite being profitable in the beginning, the company ended up with €28 million in debt. Parliament approved a state aid of €35 million to help the company stand on its feet but still ended up ceasing operations only months later.

Lazarides also told MPs of his plans to cut back on  CY staff and benefits, which according to him, were “too much”.

He said that while the company’s base of operations was in Larnaca, for staff purposes the base of operations was Nicosia, so they would be entitled to extra money for travelling to work at the airport.

He also said that during his time as chairman he managed to scrap the three-day stay in London for pilots and cut the staff by 161. Unlike Cyprus Airways, Eurocypria staff had no overnight stays abroad.

“When Eurocypria first opened up they had excellent staff with half the money in salaries, away from all Cyprus Airways issues such as the constant threat of strikes,” he added.

Lazarides said that by 1982 CY staff increased by 80 per cent while in 1987 a study found that productivity per employee was amongst the lowest in Europe though wages were high.

Asked whether he was pressured by political parties during his tenures, Lazarides said he never felt any particular pressure.

“But when an election was around the corner, the staff always increased,” he added.

Cyprus Airways, the island’s national carrier for 67 years closed in January after a decision by the EU commission declared €102 million given to it in state aid was illegal, ordering the company to return €66 million.

 

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Source: Cyprus News Agency

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