Cyprus Airways Executive Chairman Kikis Lazarides assured that both he and the CAIR staff will make every effort to give the national carrier a new breath of fresh air and to make it viable and competitive.
He also referred to the restructuring plan proposed by the
Speaking at the 60th Annual General Assembly, Lazarides said that it is evident in the air transport environment that only the most competitive and effective companies will survive. “There is no room to rest on one’s laurelsâ€, he said, as he presented the economic results for 2006 and the company’s priorities for 2007.
According to the results, the Cyprus Airways Group posted a net loss of CYP4.3 million compared to CYP 22.6 million in 2005.
He said the improvement was due to the implementation of the Restructuring plan and the profit of CYP10.6 million made by selling Eurocypria to the government.
Lazarides stressed the need top make cuts in the way the CY group operates and to improve the quality of services offered, adding that the low standard of services is due to the enormous reduction in the percentage of staff in a short time, resulting with the withdrawal of 25% of the employees, (around 500 people).
He expressed the hope that the state carrier is on the right track to effectively handle the situation, noting they have the capabilities to achieve this.
“There are no magic solutions or supernatural recipes. We believe we are on the right track to effectively handle the situation and are hopeful for the work that is being carried outâ€, he added.
Referring to predictions for 2007, Lazarides said that according to all evidence, they are not encouraging due to some negative developments such as the reduction in passenger capacity due to the strong competition, the very high costs of renting planes to carry out flights on extraordinary situations and the increase in the maintenance costs.
Lazarides said he hoped that the downward trend in passenger numbers in the last months, especially April and May, by 30 thousand, mainly from
As far as the group’s priorities are concerned, Lazarides said that with the help of experts, it will immediately proceed with a review of its flight network, will completely review its fleet to determine the correct composition which will serve the markets as far as passenger and cargo transportation is concerned, will re-evaluate the services offered to passengers and restructure the airline’s Commercial Department to make it function on the basis of modern and practical methods.
He also said that the managerial structure will be re-organised and minimized to have a more responsible participation in decision making while they are examining the possibility of joint ventures in relevant sectors of activities such as the Catering Department and the Department of Ground Handling.
The Executive Chairman also called on the government and the strategic investor, who is handling the airports, to review through talks, the high charges imposed for the new airports.
Last week, the Cyprus House of Representatives approved a bill relating to the ratification of an agreement guaranteeing a multi-million loan Cyprus Airways has secured from a local bank.
The loan, worth 78 million euro, was given to Cyprus Airways by the Hellenic Bank and the bill approved by the House concerns government guarantees for its payment.
In March this year the European Commission, at the proposal of Transport Commissioner Jacques Barrot, authorised the restructuring plan proposed by the
The restructuring plan, submitted to the Commission in November 2005, included a loan worth CYP 55 million (EUR 96 million).
The plan also provided for ongoing cost cutting necessary to restore the airline’s viability and a capital increase of CYP 14 million (EUR 24 million) involving public and private shareholders.
Cyprus Airways and the Hellenic Bank have signed the loan for 78 million euro, to help the airline pay off previous loans and improve its finances.
CAIR aims to become more viable and competitive
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