Ten airlines are ready to step in and fill the void created by the long-overdue demise of Cyprus Airways, after the national carrier shut down at midnight on Friday when its final flight returned home to Larnaca from Athens.
The European Competition Commission ruled on Friday that more than €100 mln received from the government in the form of subsidies and guarantees since 2007, violated state aid regulations and had to return at least €66 mln to the taxpayer, a task deemed financially impossible.
As a result, the 96%-state owned carrier was forced to shut down and its dwindling market share of 10% now up for grabs by more efficient and competitive airlines.
Dogged by decades of poor management and rising payrolls, the airline was obliged to sell off its assets and stay afloat, reducing its fleet to just six aircraft and only nine routes, but still maintaining a disproportionate staff of 560.
According to ANT1 TV, Greece’s Aegean Airlines and Romania’s low-cost Blue Air are keen to pick up Cyprus Airways’ traffic to and from Athens, Aegean and European budget operator Ryanair want the Thessaloniki and Heraklion routes, British Airways is ready to take over the London traffic, Air France-KLM and Austrian Airlines want the Amsterdam route, Aegean wants Paris, Israel’s El Al and Arkia both are vying for Tel Aviv, and Aegean wants the Moscow route.
The Greek carrier, that together with Ryanair, were the only two that expressed some interest to take over Cyprus Airways in the government’s privatisation effort last year, said it will use Larnaca as a regional hub and station three aircraft there. It already announced that it will launch its Larnaca-Tel Aviv daily schedule in March on board an Airbus A320, almost a year after it resumed flights to Israel from Athens, while it will also take advantage of the Cyprus Airways gap to start three weekly flights from Larnaca to Kiev, a route suspended due to the crisis in Ukraine.
Another four new destinations are expected to be announced and the changes have to take place by February 9, or the government will award these routes to others.
The state is also looking to revive destinations such as Rome, for which Aegean has shown interest, while Lufthansa wants to enhance its Frankfurt and Munich routes, and possibly add Berlin.
The ANT1 report also suggested that the government will put out tenders for the Larnaca-Brussels route within 15 days, for which the winning carrier could receive an EU subsidy, as it is a loss-making route, yet deemed essential. The TV report suggested that Air Brussels has already expressed interest.
Meanwhile, the government intends to allow a new airline to be set up, but possibly by private investors, after it bought the Cyprus Airways brand name and “flying moufflon” logo for €1.5 mln a month ago.
Meanwhile, the airline’s staff will receive redundancy pay of two months’ wages, and will share a package of €25 mln, with each worker expected to receive an average of €48,000. The workforce includes 62 pilots, 130 cabin crew, 67 in catering and support, 75 engineers and 226 office and ground personnel.
A receiver will be appointed within three weeks who will review the available assets, such as the €18 mln in cash from the sale of the last Heathrow airport slot, a single aircraft and a 25% stake in the ground handling company Swissport Cyprus.
Meanwhile, for the 4-5,000 passengers still booked on Cyprus Airways over the next few days, local travel company Top Kinisis was appointed as ticketing agent by the government and ordered to compensate or re-issue travel packages. The company said it has already received 18,000 calls locally and from abroad and that 4,000 passengers were re-issued tickets.
The agreement is valid until February 9, during which time a further 7,000 passengers will be accommodated.
Passengers still booked on Cyprus Airways flights should call Top Kinisis on the local hotline 77787878 or +357 22869999 from overseas.
Meanwhile, Bank of Cyprus said that if tickets were purchased with the bank’s cards and the alternative arrangement with Top Kinisis are not satisfactory, they should follow the procedure described on the bank’s web page www.bankofcyprus.com.cy or call 1Bank at 800 00 800.
Furthermore, the bank said that its collaboration with Cyprus Airways regarding the “Sunmiles American Express” scheme is terminated immediately and all cards transferred to the bank’s “Cashback American Express” scheme.
