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There is no doubt in anyone’s mind that the potential demise of our national carrier is all-round bad news, both for the economy in general and the struggling tourism sector in particular.
But recent events have revealed the extent to which meritocracy has been thrown out the window in exchange for political and other favours, making “public interest” organisations, such as the troubled airline, susceptible to pressure, thus depressing levels of competitiveness.
Could it be that the present government is secretly wishing for the European Commission to disapprove of the 100 mln or so euros in subsidies and loan guarantees to be considered as unfavourable state aid? And if so, will the closure of Cyprus Airways spell the beginning of the end of favouritism and trade-union bullying in public corporations that no politician has ever dared to stand up to?
The fact that recently-restructured Aegean Airlines and low-cost operator Ryanair are setting their sights on establishing a Cyprus hub does not, in itself, resolve the problems of the island’s transport isolation. The Greek airline has made some relatively good offers to travellers in past years, but would not be able to replace CAIR as it has its own shareholders to report to. On the other hand, the cheaper fares provided by Michael O’Leary’s outfit do not necessarily replace Cypriot travellers’ preferences or whims.
What is of greater concern, though, is that Cyprus Airways’ market share has been dwindling in recent years and fallen to a historic low of 10%, due mainly to high wage costs that have kept it uncompetitive and forcing past boards and managers to cut down on workforce, wages and eventually assets and routes. This has created a vicious circle as the airline has not been able to recover and return to a path of growth, with rivals breathing down their necks and vying for any piece of the action.
What the government should decide fast (and not drag its feet as with other decisions) is whether the island needs a “national carrier” and if so, what the real benefits will be to the island’s transport sector, exports and tourism.
Someone should also have the courage to admit that past pressure forced the closure of the much leaner and more flexible Eurocypria, simply because parliament and past governments weighed that the voter-staff of the charter carrier were more expendable than the national carrier, three times its size. As a result, the tourism industry has been suffering.
So, do we need a new Cyprus Airways or does the government adopt a regulatory role and supervise the aviation sector, leaving hoteliers to the mercy of a handful of airlines?
