CYPRUS: Gov’t buys CAIR brand for €1.2 mln

Troubled national carrier Cyprus Airways (CAIR) has sold the airline’s brand name and trademark to the government for €1.2 mln, according to an announcement on the Cyprus Stock Exchange.

The sale is seen as a knee-jerk effort to save the last remaining asset of the company, after suitors Ryanair and Greek carrier Aegean withdraw their interest to buy the bankrupt airline.
The announcement said that the company “signed the agreement for the sale of its logos, trademarks and brand rights to the Government of the Republic of Cyprus, for the amount of euros 1,200,000. In accordance with the sale agreement, the consideration may increase upon the completion of a new valuation.”
The brand includes the trademark emblem that symbolises a flying moufflon, the endangered wild goat endemic to Cyprus.
The government owns 96% of the shares and has been desperately trying to find solutions that would avoid a rescue by taxpayers, already burdened with austerity measures following the 2013 bailout by the Troika of international lenders.
After decades of bad management, as well as political abuse and trade union bullying, CAIR saw its losses exceed €16 mln this year, with the European Commission’s competition authority considering a total of €100 mln provided in the form of loan guarantees and other subsidies, as being unlawful state aid. Such a conclusion will bring the company to its knees and send it straight into bankruptcy.
The company currently operates a network of a dozen destinations, sold off assets and airport slots and leases a fleet of six Airbus A320s, which do not justify the 560 or so staff.
On the other hand, buyers expressed interest in the brand name and regional operating licenses, making CAIR an attractive investment to expand into the Middle East, Russia and the CIS.
The stock has been suspended by the Securities and Exchange Commission for failing to submit audited full year and interim accounts since 2012.