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State may try to recoup repatriation costs from Cobalt, ex employees slam government (Update)

Transport Minister Vasiliki Anastasiadou did not rule out suing Cobalt Air to recover the cost of repatriating stranded passengers following the airline’s grounding and assured that the gap it left behind would probably be covered by other airlines by next summer.

The minister conceded there had been a spike in ticket prices since midnight Wednesday when Cobalt announced it was suspending its operations, but they were expected to return to normality by next month.

Anastasiadou told MPs on Friday that the state had decided to cover the repatriation cost without being legally bound but did not rule out the possibility of claiming the amount, between €1.5m and €2m, later.

The House transport committee convened on Friday to discuss the problems created by Cobalt’s grounding and the subsequent revocation of its licences by the state.

Around 18,000 passengers have been affected.

Cobalt announced the suspension of its operations at midnight Wednesday after it had failed to secure the necessary cash to keep it going.

If the company can raise cash then it has the right to apply for a new licence, the minister said.

She reiterated that Cobalt’s grounding related to its financial viability and not safety issues.

Any problems to passenger traffic would be ironed out in a few months, she added.

“We believe passenger traffic will be covered by other companies and by the summer … everything will go smoothly,” Anastasiadou said. “Of course, it is an unpleasant development but it is manageable.”

The minister said she will be meeting the attorney-general on the matter but declined to provide any details.

“There is a legal aspect we want to clarify with the attorney-general about the matter. Allow me not to say more,” she said.

Cobalt’s grounding apparently led other companies servicing Cyprus to raise prices though Anastasiadou suggested it would be temporary.

Citing information from tour operators and airport operator Hermes, the minister said ticket prices were expected to return to normal in November.

The airline was forced to pull the plug after Chinese investors who held 49 per cent of its shares decided to stop funding it.

Transport ministry permanent secretary Alecos Michaelides said Thursday that the carrier was chalking up some €30m in losses per year over the last three years.

The airline’s grounding saw the dismissal of around 280 staff who blamed Michaelides on Friday.

“It is with great surprise that we saw inaccuracies and misleading comments by Mr Michaelides with the sole aim of transferring the blame and without giving the slightest sign of hope of a second chance to this company,” a statement issued on Friday said.

The staff wondered what the state had to lose if the company was given a second chance, suggesting that Michaelides’ comments “lacked seriousness”.

They also took a shot at political parties for lamenting the company’s demise instead of doing something to afford it a chance instead of being shuttered by “Michaelides and his committee.”

“After the demise of Cyprus Airways, Mr Michaelides became an expert in closing Cypriot airlines to the detriment of Cypriot consumers and without second thoughts about Cypriot workers,” they said.

 

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