Cypriot Finance Minister Harris Georgiades announced Friday that ailing national air carrier Cyprus Airways will stop its operations since following a European Commission decision for the company to pay back €66 million of state aid it had received in the past, means that it is “no longer an active economic entity”.
Georgiades, who was speaking during a joint press conference with Minister of Communications and Works Marios Demetriades, said that following the Commission’s decision the relevant licensing organizations were expected to rescind its commercial license.
“With the decision of the European Commission, the company is no longer considered to be an active economic entity and will immediately loose its license. It will, namely, not be able to perform flight schedule and therefore the procedure for appointing a liquidator will start immediately, “said Minister of Finance.
He added that the top priority of the government was to reduce, to the maximum the passenger’s inconvenience saying that the government would fully cover the cost of alternative arrangements for all passengers who hold a ticket with Cyprus Airways.
On his part Demetriades said that the country`s air connectivity was covered by other airlines operating in Cyprus, adding that steps would be taken immediately towards establishing a new private company bearing the name and logo of Cyprus Airways.
At the same time he assured however that the airline connection Cyprus remains at high levels and that the government had made all the necessary arrangements to cover air transport needs of Cyprus with other countries.
“The effort is focused on the increase of flights, on an annual basis, by all existing airlines that fly to and from Cyprus, amounting to 70”, he said adding that the market share of Cyprus Airways did not exceed 10%.
He noted that there are direct flights to all destinations of Cyprus Airways, by at least one or two airlines. He also said that there was planning for the introduction of additional flights between destinations served by Cyprus Airways, which includes the introduction of new routes.
The Minister of Finance also said that the approximately 500 employees of the company would received the total of salaries due to them and their Provident Fund.
Replying to a question, Georgiades said that employees of Cyprus Airways, could be employed in a new company created by the private sector, adding however that the Government cannot indicate the recruitment of any person to private companies.
The Finance Minister said that the decisions of 2012 for additional state aid had given a temporary life extension to the company, but made its collapse final and inevitable preventing at the same time any prospect of attracting investors that would be liable for the repayment of the illegal aid. He added that the current government ended the state aid and supported the Board in each consolidation move it took.
Former flag carrier airline of Cyprus, was established on 24 September 1947 on the initiative of the British Colonial Government of Cyprus, The government of newly independent Cyprus became the majority shareholder in 1960.