TRAVEL: Cyprus Airways bid on hold; €10m more for layoffs

The government has put on hold the final stage of selecting a successful bidder among Aegean Airlines and Ryanair to take over troubled national carrier Cyprus Airways, as the Finance Minister has said that securing European Commission approval for nearly 100 mln euros in past state aid as “highly unlikely.”

Haris Georgiades told the House Finance Committee that the final two bidders of the 22 that initially showed interest had set some conditions that are unacceptable to the government.
He added that if the airline manages to remain operational, then further cutbacks will be necessary, which is why he asked for a supplementary budget of 10 mln euros for staff compensations be approved by the parliamentary committee.
“In case an investor is found, then the CAIR sale can go ahead even tomorrow,” adding that the issue has dragged on for too long and that an investor should have been sought from as far back as in 2007.
Meanwhile, Etihad Airways has reportedly asked for a finder’s fee of 1 mln euros in order to introduce the government to potential investors, with Georgiades saying that finding new investors seems remote, especially with the EC ruling on the approval of the state aid still pending.
He said that only exclusive routes out of Cyprus are those of Paris and Amsterdam, while the government may even proceed to auction off its non-EU air operator’s certificates (AOC).
Greek scheduled carrier Aegean and Europe’s leading low-cost operator Ryanair were the only two airlines the government had shortlisted in the race to acquire troubled Cyprus Airways who initially had until November 15 to submit their final bids.
All eyes are currently on the EC ruling on whether a EUR73 mln rescue package in 2012 and a EUR 31.3 mln capital increase in early 2013 violated EU state-aide regulations.