Cyprus Airways (CAIR) have until Thursday, November 3 to submit their rescue plan to the EU in order to safeguard the future of the airline, at a time when the major unions representing the majority of staff say they are opposed to the restructuring plan.
The pilots union, PASIPY and the biggest union, CYNIKA are refusing to back the plan and will most likely be joined by the other three unions, claiming that the plan was drafted without their involvement and feedback and is doomed to fail, like the previous plans before it.
The Board and Management of the troubled airline on the other hand need to submit the plan to Brussels by November 3 in order to receive permission to borrow CYP 58 mln, which will be used to repay a CYP 30 mln maturing loan and cover CYP 10 mln cost of redundancies and CYP 18 mln needed to complete the restructuring plan.
The rescue plan prepared mostly by CAIR Deputy Chairman Frixos Savvides envisages the forced redundancy of 343 staff, 8% pay cut for pilots and managers, 5% pay cuts for all other staff, reductions in other benefits including the airline’s provident fund as well as more outsourcing of services, hoping to save at least CYP 20 mln in annual expenses.
The architects of the plan are hoping that if they win approval from Brussels and the government, then they will be able to win concessions from the unions, despite the fact that staff have said they will ignore it.
The Pilots, who previously had submitted their own rescue plan, say that the current plan is doomed to fail, since it does not address the core issues confronting the airline and instead is filled with half measures, with employees told they are to blame for the past mistakes of management and previous boards.
Savvides said as far as the airline was concerned it was the board’s job to submit the plan to the government. After that, he said, it was up to them to decide when to submit to the EU.
“It’s the government’s responsibility to submit the plan. As far as we are concerned, our job was to deliver the plan to the government and they can make any changes they wish, and decide to submit to the EU,” Savvides said.
Communications and Works Minister Haris Thrasou said the plan would be submitted despite union reservations, adding that he would be meeting with Finance Minister Michalis Sarris to discuss the financial aspects.
