Cyprus Airways losses seen at €30 mln

 — “You could be next,” says Minister —

Cyprus Airways will likely post a full-year loss of around 30 mln euros, hit by cheaper rivals and fixed costs, finance minister Charilaos Stavrakis told parliament on Tuesday.
“The viability of Cyprus Airways must worry us,” Stavrakis said, adding the forecast earlier this year had been for a loss of 2-3 mln euros.
Majority state-owned CAIR posted a first-half loss of 25.1 mln euros in August, hit by disruption from the volcanic ash cloud and Greece's financial crisis.
The national carrier underwent a restructuring in 2006 and 2007, when it shed about a fifth of its workforce and staff took pay cuts. Part of that restructuring involved spinning off charter subsidiary Eurocypria and selling it to the government for 23 mln euros.
Three years on, Cyprus went to the European Commission last week suggesting the companies be merged. The plan was blocked and the European Union urged authorities to liquidate Eurocypria, which has since suspended operations, prompting the charter operator’s staff and crew to stage four days of strikes across the island.
“The clear decision by Brussels is that the government cannot continue to support loss making companies,” said Stavrakis, who was accused by Eurocypria staff of misleading them. The minister was surrounded and heckled by ECA staff calling him to resign as he tried to enter the parliament building where he revealed that some of the employees could be absorbed into the civil service if they are not hired by Cyprus Airways.
The government secured a 35 mln euro cash injection for Eurocypria in February, most to repay bank debts, just months before it acknowledged Eurocypria was teetering on the edge of closure.
However, Stavrakis warned that over the next few months Cyprus Airways could face similar problems to those that led to Eurocypria’s closure.
He told MPs that ECA staff would be offered additional redundancy packages, while an early retirement and voluntary redundancy deal will also be offered to CAIR staff as part of the airline’s restructuring plan, paving the way for lower-earning ECA staff to be hired by Cyprus Airways.