Cyprus Airways (CAIR) hotly denied reports that it risks collapse if the European Commission does not give its consent to a government backed loan amounting to CYP 30 mln on May 3, 2005.
Press reports had suggested that if the EC does not give its backing to the loan, then the management would proceed with drastic layoffs, including the possibility of total closure.
“We strongly deny the report,” an official press communique from the CAIR said on Friday, though acknowledging that the airline is eagerly awaiting word from Brussels on whether or not it will be eligible to receive the emergency loan from Deutsche Bank, backed by the government.
The press reports suggested that the management had prepared several action plans in the event that Brussels blocks the loan and forces the airline to cease operations. One of the scenarios, quoted by Stockwatch is to shift the most popular and profitable routes to Eurocypria, until the airline can resume operations. In sharp contrast with CAIR, its charter subsidiary Eurocypria reported a CYP 2 mln profit in 2004.
The same sources said that even if the loan is approved, management plans to proceed with additional measures to cut costs, including the layoff of 600 staff, based on the formula that for every airplane, an airline should have only 100 staff, meaning, the group should not employ more than 1200 persons.
The drastic action according to Stockwatch also will result in the termination of flights to most Middle Eastern destinations, except Beirut, and the termination of the Larnaca-Brussels route, or shift it through Athens, the termination of more services and more out-sourcing such as the catering division, which will save at least CYP 1 mln.
The airline is also proceeding with the mandatory redundancy of 22 chief stewards, while other reports also talk of flight cutbacks resulting in the reduction of the fleet from the current 12 to 6, which would lead to even more layoffs.
The airline insisted that its new action plan is still in the making, calling on its staff not to listen to such reports.
Meanwhile, CAIR announced additional Easter packages, with return flights to Athens starting from CYP 41 and Thesaloniki CYP 61, excluding taxes. CAIR is also reminding that its London flights start at CYP 130 return while fares to other EU destinations (except Paris and Amsterdam) start at CYP 150.
CAIR also announced extra flights on its Athens and Thesaloniki routes to cater to the needs of travelers during the Easter holidays.
