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Unions fear Cyprus Airways selloff

Unions fear Cyprus Airways selloff

October 29
11:14 2014

Union workers have called an emergency meeting today to discuss Cyprus Airways ongoing efforts to find a new buyer for the ailing airline, ‘Cyprus Mail’ reports.

Amid reports that the Greek Cypriot government has decided to sell the company off either to Aegean Air or Ryanair, workers fear they will face either unemployment or large pay cuts.

Anticipating the effects on the workforce of a “hostile” buyer, a union statement said, “The bulk of the work force is justifiably filled with feelings of disappointment and anger over their future and job security”.

The head of Cyprus Airways Makis Constantinides, last week described the dire state of events saying: “Perhaps never in the past, was the situation as critical as it is today. The loss-making course has not been halted, as was the objective of the latest restructuring plan, while productivity in relation to competitiveness continues to be at a low level”.

Efforts to sell the airline are being hampered by an investigation by the EU into a 73 million euro rescue package given by the government in 2012 and a further 31.3 million euro lifeline in 2013. Such funding breaks the “standstill obligation” where state aid must not be granted before the EU Commission has approved it. This approval would have been unlikely because Cyprus Airways received rescue and restructuring aid in 2007, so it is barred from receiving any further bailouts for 10 years.

Announcing a doubling of its full-year net losses, Cyprus Airways recently said its future depended on getting the go ahead from the Commission.

The EU Commission will decide whether CY must return that money to the state. A decision to return the money would force the airline to close down.

 

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