Cyprus Airways (CAIR) faces funding delay

Hellas Jet set to close

The future of troubled national carrier Cyprus Airways (CAIR) looked bleak at the beginning of this week following news that the European Commission will delay its decision about whether the Cyprus government can guarantee a CYP 30 mln rescue loan.

The European Commission will not hear the case now until May 3, rather than the initially planned date of next Wednesday April 20.

Meanwhile, Cyprus Airways, which made a loss of CYP 37 mln in 2004 and continues to face serious financial difficulties, confirmed on Monday that it had not found a buyer for its Athens subsidiary Hellas Jet.

Formed less than two years ago in June 2003, Hellas Jet has been losing about CYP 1 mln per month and is expected to be shut down in May.

Earlier this year the former chairman Constantinos Loizides caused a furore when it emerged that in January he had lent Hellas Jet CYP 3 mln from the EuroCypria subsidiary without the knowledge of the Cyprus Airways board.

In a statement to the Cyprus Stock Exchange, where the government holds its majority stake, Cyprus Airways said that proposals on the sale of Hellas Jet were “not satisfactory”.

Dutch and a British companies were reported to have shown some interest in buying the subsidiary.

A final decision on the fate of Hellas Jet will take place on Wednesday, when the board of Hellas Jet meets. Since the recently appointed chairman of the board of Cyprus Airways, Lazaros Savvides, is also the chairman of Hellas Jet, the decision is thought to be a foregone conclusion.