Cyprus Airways loan approved

The House of Representatives approved a EUR 78 mln loan to Cyprus Airways to help the airline pay off previous loans and improve its finances. The loan is backed by government guarantee and will be taken from Hellenic Bank. Part of the proceeds will go to pay off a loan, again backed by government guarantees from Deutsche Bank.

Executive Chairman of CAIR Kikis Lazarides expressed the hope that in 2008 the airline will reverse the negative trend of the past few years, which were marked by heavy losses and begin a profitable course.

The State aid in the form of the guarantees has been approved by the European Commission and is part of the restructuring plan compatible with EU internal market guidelines on restructuring aid.

Previously, MPs had blocked the loan guarantee plan until the airline could submit a list of officers who had participated in authorising the disastrous expansion drive in Greece with the setting up of Hellas Jet, which cost the airline dearly and other management decisions that piled up millions of pounds in additional losses.

Last week, the former General Manager of CAIR resigned without providing the reasons for his resignation.