DISCUSSIONS are under way between Cyprus Airways (CY) and the government for the potential acquisition of the national carrier’s charter subsidiary Eurocypria.
The news emerged in a brief announcement made to the Cyprus Stock Exchange (CSE) on the eve of a deadline for CY’s unions to accept or reject a restructuring plan.
Tourism Minister George Lillikas said yesterday that if any of the unions reacted to the controversial cost-cutting plan by going on strike, it would only serve to hasten the closure of the national carrier, which is 70 per cent owned by the government.
The possibility of purchasing Eurocypria, set up in 1991 as a low-cost charter firm, was discussed at a Cabinet meeting on Wednesday, but no further details emerged until the CSE announcement yesterday.
It was known that the government had a Plan B in the event the unions did not agree to the plan and CY was be forced to close. Although the government has not made a specific decision to purchase Eurocypria, it must have the legal aspects in place for Eurocypria to take over immediately so that slots and other operational aspects can be transferred without delay.
Otherwise if CY goes under, Eurocypria, as a subsidiary will also go down.
“The purchase of Eurocypria is one of the alternatives which we have discussed from those we looked at,” said Transport Minister Haris Thrasou yesterday.
“There is no Cabinet decision but the initial movements are being made. The parent company of Eurocypria, Cyprus Airways, is a public company and there are some procedures, legal and otherwise, that need to be followed when it comes to the stock market and the Securities and Exchange Commission.”
Thrasou said that once all the answers were in from the five unions, the ministerial committee of four would decide on the next step. The committee is due to meet tomorrow.
However, not all the unions have submitted their answers.
So far, only the engineers union ASYSEKA has given a positive response to the final version of the plan. A second union SIDIKEK-PEO was due to give its answer last night.
The remaining unions, cabin crew SYPKA, pilots PASIPY and the airline’s biggest union CYNIKA are due to respond today, but yesterday it appeared as if the pilots at least would angle for a few more days grace.
“We need answers by tomorrow (Friday), because the deadline is getting very, very tight,” said Thrasou. “We are at a critical juncture and there is no more room for manoeuvre.”
It has been made clear to the unions that their choice is either to accept the plan or see the company close down. The plan includes a possible 500 redundancies, salary reductions and other cost cutting measures.
Thrasou said it was hoped that all of the unions would respond positively. “We all have a common objective and that is to save the company,” he said. “I do not believe that there exists one worker in the company that wants to see it closed down.”
Asked if he was afraid the answer from some unions might be ‘no’ and what might happen in that event, Thrasou said the ministerial council would evaluate the situation if and when that happened.
A similar question was put to Lillikas earlier in the day. When asked what would happen if one union dissented and responded with strike action, he said: “With the financial situation that the company is in, if there is a strike, it will just close down more quickly.”
A spokesman for PASIPY said yesterday that the pilots’ union was still waiting for some clarifications from the company in writing. The spokesman doubted that the union would be ready to submit its reply today. “It might be closer to the second or third of the month,” he said. ‘I don’t think there will be a problem for the sake of an extra one or two days.”
