CYPRUS Airways (CY) yesterday confirmed that it had rejected a proposal by private Cypriot carrier Helios Airways to lease three planes belonging to the loss-making national carrier’s Athens-based subsidiary Hellas Jet.
“A proposal was made but it was rejected,” a spokesman told the Cyprus Mail, but declined to elaborate.
According to the reports in Phileleftheros, on Tuesday, Helios, which was recently bought out by the Libra Group, offered $17 million (£7.2 million) to lease the three new aircraft from Hellas Jet, which has been losing around £1 million a month since it was set up 18 months ago.
Helios wanted to lease the first plane from next April and the other two in May, as the airline has plans to expand and was already considering a fourth aircraft acquisition.
The private carrier made its proposition to the CY board nearly a month ago, but it was not discussed until a meeting on Wednesday afternoon, where board members judged the proposal to be “financially disadvantageous”, as it would mean leasing the planes at 40 per cent below market value.
CY chairman Constantinos Loizides told Phileleftheros that in any case the board had received expressions of interest for Hellas Jet from four other investors, and that a decision would be taken shortly. However, he declined to say if the proposed investors were interested in purchasing the airline or leasing its aircraft. Hellas Jet currently flies daily from Athens to Manchester, Brussels, Paris and London.
The situation at Hellas Jet was highlighted during the recent negotiations between CY management and its unions on a strategic plan to save the government-owned carrier’s finances. CY faces losses of some £30 million for 2004.
The unions blamed the loss-making Athens subsidiary for CY’s woes, which forced the company to draw up the strategic plan, under which unions have been asked to make concessions on wages and benefits, and to agree to a number of redundancies.
Although CY and the executive boards of the five CY unions have agreed in principle to a watered-down version of the original plan, union members at their general assemblies have not yet approved the plan.
CY’s biggest union CYNIKA, which has a number of branches, has promised to complete the job by next week. Pilots union PASIPY, which has warned that its members could still reject the proposals, will not hold its general assembly until January 10. Two other unions have not held general assemblies, a source said, adding that one of those had asked for more clarifications.
In the meantime, CY laid on an extra 59 flights over the Christmas period, in an attempt to pick up the holiday traffic, in particular to Greece and the UK.
The extra flights have been operating since December 20, and will finish on January 4. They include 29 extra flights to Athens, 21 to Salonica and nine to Crete. Almost 100,000 people will have travelled to Greece during the holiday period.
For London, CY doubled its two daily flights to four for the holiday period.
A number of limited special offers were also introduced.
Athens begins at £53 instead of the regular price starting at £72, and Salonica at £69 instead of £100. From January 12 until March 12, CY will have special limited seats to London for £98 instead of £130.
