FORMER Cyprus Airways (CY) vice chairman Achilleas Kyprianou yesterday expressed his concern over news that the ailing carrier was studying the possibility of replacing its fleet of Airbus A320s.
Only weeks after posting net losses of over 23 million pounds, current chairman Lazaros Savvides announced on Thursday that CY had commissioned a study that would look at the possibility of replacing up to seven of its aircraft on the grounds that they were more expensive to maintain than to replace or to lease new ones.
The news came as a surprise to most as the company is in early stages of implementing a controversial restructuring plan. Kyprianou who was with the board when it saw through its previous fleet renewal some five years ago said the news had caused him concern.
“I consider the (previous) fleet renewal in 2001 as a crime against the airline,” said Kyprianou. “That decision burdened the airline with obligations of around $350 million in financial obligations for purchases and long term leases.”
He said the “excuse” at that time was that CY’s two Airbus A310s were 16 years old and their engines were no longer in production. “Now the excuse is given for the A320s is that they are 17 years old and their engines are no longer in production,” he said.
In addition to the seven A320s that CY owns the airline leases a larger A330 and only a few years ago purchased two smaller A319s. The airline also leases out another A320 to its charter subsidiary Eurocypria.
Savvides said that the cost of maintaining the current A320s engines, was more than the cost of replacing them. Newer engine types were not compatible with CYs older A320s as the airline was one of the first purchasers of Airbuses in the world, he said.
of the first purchasers of Airbuses in the world.
But Kyprianou said the excuse doesn’t wash. “These aircraft are designed for a useful life of at least 25 to 30 years,” he said. “It’s ridiculous that you have to retire them at 16 ore 17 years. If every time an engine goes out of production aircraft have to be renewed, then airlines would never stop changing their aircraft every ten years or so.”
Kyprianou also revealed that the original fleet of eight A320s had five spare engines, although one was destroyed during transportation for which the board at the time opted to forgo for a return of cash.
“If the fact that engines were out of production was so serious why did they (the current board) sell a spare engine last year,” said Kyprianou.
“If this is a critical issue, you don’t sell one engine.”
He said an A320s engine costs around $4 million used or new and is reconditioned after several thousand hours of flying time, at an additional cost of $2.5 million.
Kyprianou said what he is unable to understand is why there has been no criticism of the move to replace the fleet given the financial state of the company.
He said that in 2001, the opposition at the time, including members of the Finance Committee of the House such as Tassos Papadopoulos, Marcos Kyprianou, Kikis Kazamias, Doros Theodorou and others strongly criticised CY for its decision to renew the fleet and place an financial burden on Cyprus Airways.
“The situation of Cyprus Airways now is even more critical, therefore I am deeply worried about the latest developments at Cyprus Airways and personally after spending more than ten years on the board of directors I am unable to see any logic in such a move,” said Kyprianou.
He said it was not only him that was worried but had also seen reports that the EU Commission had expressed its concern to the government
regarding the restructuring plan and the course of developments in Cyprus Airways. “If they are worried it is more than obvious that things must be more than critical,” said Kyprianou.
Savvides said on Thursday two studies were being carried out, one into fleet renewal and a second relating to an overhaul of CY destinations. He defended the likelihood of a fleet renewal beginning some time in 2007 if the studies recommended such a move but he said it did not mean it would happen all at once and that aircraft could be replaced slowly.
