CLOSE to 400 employees of Cyprus Airways (CY) asked for voluntary redundancy, but not all will be let go, while others who did not apply will be laid off anyway, vice chairman Frixos Savvides said yesterday.
The airline had asked for 500 voluntary redundancies, more than 25 per cent of its work force, to help the company back on its feet under a restructuring plan, which unions finally said ‘yes’ to this week after more than a year of wrangling.
The deadline for redundancy applications was Thursday at 6pm. However, Savvides said management had received an overabundance of applications from certain departments, and not enough from others.
“We are happy with the response, but from the people who said they wanted to retire there are certain categories we will not allow to leave, like engineers for instance. We will not allow them to leave. We can’t afford to lose 25 engineers,” he said.
More than the required number of pilots also asked for voluntary redundancy. The plan called for seven pilot layoffs, but double the number from the senior ranks applied. Also, cabin crew volunteers exceeded the limits sought.
“The ones we decide to keep, we will call them in and negotiate with them their terms of stay for the simple reason that for those in flight operations, pilots etc,. the company invested a few million pounds in them to make them what they are, and we cannot afford to let them go like this. We have to convince them to stay,” said Savvides.
In terms of the ones who are allowed to go, it would just be a matter of determining the timing, Savvides said.
After deciding who it wishes to keep, CY must then make up the list of those who will face compulsory redundancy as part of overall departmental cut backs.
“We will notify them that they have to leave as part of the redundancy plan,” he said. “Some positions will be redundant. They will not be filled. We know from where we will look for the rest of these positions.”
Savvides said that by the end of next week, the issue should be sorted. “But the most important thing is that the plan is already in operation since all the unions said yes, which was unexpected,” he said.
The unions had been mulling over the final version of the plan since before Christmas and were told it was a take-it-or-leave-it deal. Before the positive responses began to trickle in this week, the government upped the stakes last Saturday by taking the decision to buy CY’s charter firm Eurocypria. The plan was to save the profit-making enterprise from going down if the national carrier was forced to close. The sale will still go ahead as a back-up option for the future as CY is still not out of the woods financially. The deal, which could be finalised as early as next week, could inject as much as £15 million in CY’s coffers.
Losses in the state-owned carrier for 2005 are expected to be in the region of £28 million but it hopes the restructuring will save as much as £22 million over the next 12 months.
The airline needs approval from the EU for a multi-million pound loan to pay off an earlier £30 million loan and to finance the cost of restructuring under the plan, including the redundancy payments. Even if everything goes according to plan, it could take CY two years to return to the black.
The government yesterday welcomed the unions’ acceptance of the plan.
In a written statement, Spokesman Kypros Chrysostomides said: “The government is exerting every effort to secure the approval of the plan by the European Commission, so that it can provide the necessary guarantees for the company to take a £70 million loan.”
He said the government’s aim was to save the company and to see it become profitable once again. To do this, he said that drastic measures had to be taken, which made redundancies and salary cuts necessary.
