CYPRUS Airways (CY) has again deferred its decision on the purchase or lease of new planes, as competition between rivals Airbus and Boeing intensified.
But widespread media speculation said the airline had already decided. As negotiations for the deal entered their last leg, reports yesterday said the CY board had opted for Airbus, the suppliers of its current fleet.
Politis newspaper said the national carrier had chosen the European manufacturer in view of political considerations linked to EU accession.
Since last year, Cyprus Airways had set itself several deadlines to reach a decision. The latest was January 31, today.
But CY chairman Haris Loizides was angered by yesterday’s reports. He denied that any decision had been taken and said that if information had been leaked to the press, it was designed to serve “particular interests”.
“No decision has been taken,” he said.
“The reports are wrong. I do not confirm this and such acts obviously hurt the interests of the company.”
CY spokesman Tassos Angelis told the Cyprus Mail the airline needed a “few more days”, but could not be specific on when the board would meet to reach a final decision.
“We are not ready yet,” he said. “We are in the final stage. We are still evaluating the proposals from both companies as well as several leasing companies.”
Angelis described yesterday’s reports as “pure speculation”.
“It is not true,” he added. “The decision could be made in the coming days or the coming weeks.”
Meanwhile representatives of both Airbus and Boeing are on the island this week to step up their campaigns for the lucrative contract, which is worth hundreds of millions if the airline decides to replace its fleet rather than lease new planes.
Both companies have been touting their latest technologies through contacts with the press. The EU and the US are also nudging on the political side behind the scenes, aviation sources have told Reuters.
CY currently has 12 Airbuses, eight A320s, which seat 165 passengers each, and four A310s, which seat 241. Three of the A320s are leased to CY’s charter arm Eurocypria. The average age of the fleet is 10.7 years.
The A310s, however, are getting older and expensive to maintain, and CY has thought about either replacing them or leasing new aircraft, and is the process of preparing a fleet plan for the next 10 years.
The A310s are mainly used for the longer-distance routes to the UK and Western Europe and have a higher daily utilisation
The airline still has a £40 million loan on the current fleet from the original £200 million.
CY took delivery of its first two Airbus A310s in the spring of 1984 and ordered a third for delivery in 1985. The same year, the company ordered four A320s for delivery in 1989, with an option for an additional one for later delivery. CY in fact became of the five launching airlines of the A320 programme.
In 1987, the company decided to exercise its option on four additional A320s for delivery in 1991 and 1992.
In addition to the possible replacement of the four A310s, CY is moving in the direction of expansion and hopes to acquire two or three smaller planes of around 120 seats to help add frequency to short-distance destinations such as the Middle East and Athens. The company has already leased two additional planes.
Today, CY will submit its bid for a share in ailing Greek national carrier Olympic, it said in an announcement yesterday.
CY announced that it would submit a non-binding proposal for a majority stake in Olympic as part of an investment consortium.
The bid will be submitted in London at the headquarters of Credit Suisse, which is acting as a consultant for Greece. It is not binding and does not obligate the airline at this stage.
CY wants to be at the centre of a consortium of Cypriot, Greek and foreign investors with a view to obtaining over fifty per cent of Olympic.
The Cyprus Mail is the only English-language daily newspaper published in Cyprus. It was established in 1945 and today, with its popular and widely-read website, the Cyprus Mail is among the most trusted news sites in Cyprus. The newspaper is not affiliated with any political parties and has always striven to maintain its independence. Over the past 70-plus years, the Cyprus Mail, with a small dedicated team, has covered momentous events in Cyprus’ modern history, chronicling the last gasps of British colonial rule, Cyprus’ truncated independence, the coup and Turkish invasion, and the decades of negotiations to stitch the divided island back together, plus a myriad of scandals, murders, and human interests stories that capture the island and its -people. Observers describe it as politically conservative.
