Collapsed Cypriot airline Cobalt Air said Friday it wanted more time to find investors after the aviation authorities revoked its license following the indefinite suspension of all flights.
“We wanted more time, but our license was revoked,” Cobalt Air chairman Grigoris Diakos told state radio Friday.
“We asked for a suspension, we needed two months to find a strategic investor after the Chinese investor pulled out,” he added.
Cyprus’ Air Transport Licensing Authority (ATLA) decided to revoke Cobalt’s operating license, senior transport ministry official Alecos Michaelides said.
He said there was no reason to temporarily suspend the license as there was no sign of a solid rescue plan.
“A company that is constantly posting losses, and especially losses of around 30 million (euros) a year over a three-year period cannot survive, while finding an investor becomes even harder,” Michaelides told Ant1 TV.
He said the strategic Chinese investors are estimated to have put in €100 mln, however losses continued unabated.
Diakos refuted any suggestion that the company went belly up due to mismagement, but critics argue that Coblat grew too quick with an ambitious flight programme it could not cope with.
Others said the demise was down to the lack of a proper distribution and pricing policy while Cobalt lacked cooperation deals with other airlines.
Although the airline’s license has been revoked, it can reapply to resume operations once it finds the necessary financing, the government said.
Cobalt Air ceased all operations at Wednesday midnight and entered into administration process, after 2 years and 3 months of operations, expressing “great regret”.
Transport Minister Vassiliki Anastassiadou was summoned to parliament on Friday to brief MPs on the sudden downfall of the largest Cypriot airline.
She said two million euros had been allocated for the repatriation of thousands of passengers left stranded by the collapse of Cobalt.
Anastassiadou said that other airlines would come in to fill the gap left by Cobalt once the new summer season starts again.
Air fares increase
“The market has reacted with a temporary rise in air fares this week, but prices should return to normal levels in November,” Anastassiadou told reporters.
She said all Cyprus-based airlines were being properly monitored and there were no other companies facing financial difficulties.
Several airliners announced that they were offering special fares to accommodate stranded passengers.
Cost of the closure is estimated at €20 million in loss of revenue to the government plus the benefits it will to have to pay to the 250-odd staff made jobless.
Cyprus said Thursday it will pay to ensure hundreds of Cobalt Air passengers stranded on the holiday island can return home safely after the sudden collapse of the low-cost carrier.
In a surprise announcement posted on its website late Wednesday, the airline said it was cancelling all flights within hours "due to indefinite suspension of Cobalt's operations".
It warned customers its offices would no longer be staffed and urged them to seek refunds through their travel agent or credit card company.
The closure comes just two weeks after Latvia-based Primera Air filed for bankruptcy and a month since Belgian airline Skyworks took the same course.
Cobalt was launched only two years ago, filling the void to become the island's biggest airline after state-owned Cyprus Airways went bankrupt in January 2015.
Employing many pilots from the defunct national carrier, it went on to operate 13-15 flights daily, carrying up to 3,000 passengers to 23 destinations including Athens, Beirut, Heathrow, Paris and Tel Aviv.
It is now hoped other carriers will step in to make up the 120,000 annual passenger traffic shortfall left by Cobalt.
