THE possibility of closing Cyprus Airways (CY) and re-opening it under another name is one of the options on the table if the airline fails to agree crucial changes with unions this week.
Commenting on reports that there was an official Plan B in reserve, CY vice chairman Frixos Savvides said yesterday he could not comment on the existence of such a formal Plan B.
Phileleftheros reported yesterday that unless there was agreement with the unions on changes to the controversial restructuring plan by the end of this week, Plan B would be implemented.
This would involve closing down CY and reopening it under another name, with state and private sector participation but with a smaller number of employees, the amount needed to ensure the efficient operation of the new company at a lower cost.
Savvides said he had not seen the reports and that any name given to the alternative had been the work of the newspaper itself.
“We haven’t given the plan a name yet,” he said, adding that to do so would give the impression the company was blackmailing the unions at a time of negotiations. But he said the company owed it to its shareholders to have an alternative in place in case the talks failed. The majority stake in CY is held by the state, and Savvides said there was no question of closing CY permanently.
“Cyprus as a tourist destination cannot function without Cyprus Airways,” he said.
“It would do tremendous damage to all sectors of the economy if there was a permanent closure of Cyprus Airways, so we have to have alternatives and these alternatives are in place, but they are in place in the extreme event that we will not find a logical solution with the unions.”
Savvides said the unions understood the situation very well. “This is something that was made public by Phileleftheros, but even it wasn’t in the newspaper, everyone knew we would not be sitting there waiting for the end. We would do something,” he added.
Negotiations with the unions on their suggestions for changes to the plan will begin today and continue until the end of the week.
CY’s board was meeting last night to work out a schedule for the round of talks, which are expected to be intensive.
The unions submitted their proposals as an alternative to the plan the airline has already handed over to the EU as a precursor to approval of a £58 million loan needed to restructure the airline. The plan includes laying off around one fifth of staff and cutting wages and benefits.
The unions have rejected the original plan, saying the airline was placing more emphasis on cost cutting rather than increasing revenue.
Savvides said he was optimistic the so-called Plan B would not have to be an option. “There is light at the end of the tunnel,” he said.
