Cyprus Airways discussions continue
The meeting of Cyprus Airways managers with union bosses in the presence of three government ministers was adjourned for 4pm today following yesterday’s inconclusive meeting in Nicosia.
Trade unions said they were not consulted by the government in preparing the final draft of a rescue package submitted to the European Union last week that aims to secure a multi-million loan that would be regarded as state aid.
The majority government-owned national carrier was expected to resort to major cutbacks and job redundancies in order to slash costs by CYP 22.5 mln. However, unions were not prepared to make sacrifices of any more than CYP 5 mln that resulted in a deadlock.
On the contrary, unions refuse to accept pay cuts and propose to raise air fare prices by CYP 5 per leg per ticket for an annual revenue increase of CYP 4.5 mln, while they also propose moving the airline’s head offices to Larnaca for a further saving of CYP 5-6 mln.
The broad-based meeting agreed yesterday for further discussions over the rescue plan, which is seen as the last attempt to help shore up the financials of the troubled airline.
Tuesday’s meeting at the Holiday Inn was attended by the ministers of Communications and Works, Labour and Commerce, Industry and Tourism as well as the Director General of the Finance Ministry, CAIR management and the heads of the five unions representing the staff.
CAIR Chairman Lazaros Savvides said that during today’s meeting, the two sides will present detailed positions regarding the cost reduction and revenue boosting plans.
“We want to continue the dialogue,” he said.
CAIR unions have rejected the rescue plan that would lead to 385 layoffs and pay cuts of 15% for most of the employees. The plan was submitted to Brussels on Thursday in what was a clear message to unions that there is no turning back and that the restructuring was non-negotiable. But no matter how hard the government, from the president down, tried to explain that the choice was only between restructuring and closure, union bosses remained defiant, issuing strike threats, demanding negotiations and trying to win public sympathy.
Union bosses insist that staff should not be the only ones to pay for the mistakes of previous boards who bought and sold millions of pounds worth of aircraft, saddling the airline with millions of debt.
The unions also want the airline to boost fares following an increase in fuel costs, but the management says this option was considered when the rescue plan was prepared but was deemed as not being applicable.
Pilots, who are accused of being among the best-paid in the world and cabin attendants’ pay packages were more generous than those at much bigger and financially healthier airlines have meanwhile said they can find interested buyers.
Management wants to find cost savings of CYP 20 to CYP 25 mln a year to bring the airlines financials back in order.
