The main unions representing Cyprus Airways staff are moving to reject the rescue plan submitted by the Board, according to reliable information secured by the Financial Mirror.
CAIR’s largest union CYNIKA, pilots union PASIPY and engineers union ASSYSEKA all criticised the airline’s board for only presenting them with a minimum of information on the controversial plan, which calls for redundancies, outsourcing, cost cutting and changes in the way the company operates as it aims to save some CYP 20 mln in cost savings.
The engineers warned that any staff cut backs in their department could jeopardise the safety of the airline.
The plan, which was handed over to the government, must be submitted to the European Commission on November 2, so that the airline can obtain permission from the Commission to secure a CYP 60 mln loan, the proceeds of which will be used to pay off CYP 30 mln that the airline borrowed six months ago to stay afloat. To obtain EU approval it must prove it is still a viable concern.
Management now wants the unions to agree in principle by the end of the month to the basic provisions of the plan but has not given out details of where the cut backs would be made. The board says this can be discussed in negotiations up until the end of the year.
Implementation of the plan is due on January 1, 2006.
The plan targets total savings of CYP 20 mln, of which: CYP 6.1 mln will be achieved from the redundancies of 340-350 staff. The airline wants to shed 75 jobs from the accounting department, 50 from the catering department, 40 among stewards/air hostesses and 40 from customer service.
The airline wants to save another CYP 5.9 mln by forcing Managers and pilots to take an across-the-board 8% pay cut while other staff are supposed to take a 5% pay cut.
Out sourcing, financial engineering and cost containment is supposed to save another CYP 3.5 mln while the airline anticipates an increase of CYP 4.2 mln in revenue to reach its desired CYP 20 mln cost saving and revenue increase target.
Communications and Works Minister Haris Thrasou, who received the plan from CAIR Chairman Lazaros Savvides, said the proposals were very important for the future of the company and was the last chance to save the airline.
Savvides said the plan must be implemented as a whole. He said it was no use for the airline to implement either redundancies, or across-the board wage cuts, or cost-cutting in isolation.
“Unfortunately for the company to go forward and have a future all of the proposals must be implemented concurrently,” he said. “It’s no use cutting staff or wages without changing the way the company works and that means in all departments.”
Savvides said the airline’s board would work with all of the unions to reach an agreement on the contents of the plan. He said the plan would be given to the Finance Minister with whom it would be studied. He said the timetable was strict. Savvides said however he was optimistic that a positive conclusion would be reached with the unions.
CAIR Deputy Chairman Frixos Savvides said the airline did not have enough cash to pay the November and December wage bills and failure to agree to the plan would mean its closure.
