By Charlie Charalambous
FOR YEARS Cypriot travellers have been paying over the odds to travel with Cyprus Airways. Now prices are falling, but the national carrier must slash it’s bloated staff and salaries to keep up with the competition.
“We believe Cypriots should pay less, and we are offering lower fares than before in readiness for complete liberalisation,” CY spokesman Tassos Angelis told the Cyprus Mailyesterday.
The airline can no longer charge over £300 return to London and expect Cypriots to stand for it in an increasingly competitive market.
For this reason, CY’s peak fares to London — except for August — are down on 1998 by an average of 28 per cent across the board.
The range of Economy class fares to London this year varies between £143 and £250; last year the cheapest fare was £249 return and the most expensive £ 289.
“The prices we are offering now were unthinkable four years ago, which shows we are already in the business of competing, but to continue we need to cut costs,” said Angelis.
Nevertheless, buying a normal Cyprus Airways return ticket to Larnaca from Gatwick or Stanstead would be about £100 cheaper, said an industry source.
“It’s cheaper to buy a return ticket from England because Cyprus Airways’ routes originating from Cyprus are still protected. You’d pay twice as much flying to Dubai than from Dubai for example,” said the source.
During last week’s costly and disruptive CY pilots strike, everyone from ministers to the company chairman waxed lyrical about how the consumer could no longer subsidise pilots’ high salaries by paying exorbitant fares.
Chairman Takis Kyriakides proclaimed that in a deregulated market, CY’s charter arm Eurocypria could easily compete for the lucrative Athens route at £29 one-way — even giving easyJet a run for its money.
But the reality on the ground indicates that CY needs to shed around 700 of its 2,000 staff, cut wages and restructure working conditions in order to compete in deregulated skies.
“Consumers are not just subsidising overpaid pilots, but all Cyprus Airways employees, as the company is overstaffed by six or seven hundred,” an industry insider said.
Even Angelis, although not wanting to talk about figures, agreed the company’s restructuring programme had to go ahead if it was to survive.
“We are trying to compete, but at the same time we need to cut costs, which means cutting the wage bill, allowances, overtime, sick leave and the number of employees.”
He said the only way European and American airlines had survived was by slashing salaries at the same time as reducing fares.
“With increased competition come lower fares, which in turn mean lower salaries. If you can’t compete you go out of business,” said Angelis, spelling out his vision of the future.
For all CY’s bad press, the Association of Cyprus Travel Agents believes the airline is not overcharging its routes, and — with £10 million of profits for 1998 — is actually on the right track.
“I do not think Cyprus Airways is overcharging regarding the fares because fares are regulated by competition and nothing else,” said the association’s general secretary Thassos Katsourides.
He said the carrier could survive deregulation if it restructured work practices, increased rationalisation and improved strategic alliances.
“In my unbiased opinion, Cyprus Airways can survive if it restructures properly, because it offers one of the best services of any airline,” said Katsourides.
