TRADE unions representing Cyprus Airways (CY) employees held a “spontaneous” demonstration outside the House of Representatives yesterday morning, protesting against the government’s proposal to inject €35 million in the form of share capital into 100 per cent state-owned charter airline Eurocypria.
Speaking to reporters on behalf of the six unions which represent CY employees, SYNIKA-SEK President Andreas Pierides said that the “spontaneous demonstration by CY employees” was an indication that they would “seriously and responsibly try to save the Cypriot air transport industry”.
He added that then CY unions are calling for the two airlines to be merged in order to end competition between them, but “without a single employee losing his or her job”.
For several months, both CY management and unions have made insistent calls that Eurocypria – which was sold to the government by a cash-starved CY in 2006 – should either be closed down or merged back into CY.
Eurocypria Executive Chairman Lefteris Ioannou has countered by repeatedly stating that Eurocypria and CY are addressing different markets and operate on a significantly different basis, and so rather than seeking to merge, the two airlines should co-operate in order to make shared cost savings.
The ailing charter airline – which according to Ioannou is carrying €30-35 million in debt – needs €7 million urgently in order to refinance at least two loans falling due in the coming weeks.
Despite assurances from Ioannou to the House Finance Committee last week that the company is already seeing the benefit of extensive structural and operational changes during 2009, an urgent injection of share capital by the government appears to be his only financing option.
Pierides said yesterday that the way the political parties are approaching the issue “unfortunately will lead to the destruction of the air transport industry.” He added that during today’s scheduled meeting with House President Marios Garoyian, the CY unions “will call for approaches which will ensure that Eurocypria will not have financial problems, but at the same time that commitments will be given that the right moves will be made so we can keep air transport in Cyprus alive.”
Following yesterday’s demonstration, CY staff representatives met with House Finance Committee vice-chairman Angelos Votsis. They repeated the recent proposal by CY unions that the government should commission a study by independent experts into the future of Cyprus’ air transport industry.
Speaking to reporters afterweards, DIKO MP Votsis referred with satisfaction to the agreement signed this week by Eurocypria with the Olympic Holidays Group, under which the airline will carry 60,000 package tourists from the UK to Cyprus and 16,000 tourists to the Greek islands during the 2010 summer season.
Votsis said that the 27 per cent increase in profitability of this year’s contract with Olympic would “very substantially help the company to cover part of its future strategic financial needs”. He added that by the time of Thursday’s vote by the House of Representatives Plenum on whether to approve the €35 million, the House Finance Committee expected the airline’s pilots to confirm in writing its informal 2008 agreement to a five per cent wage cut.
Votsis said that the position of government partners DIKO and AKEL was to approve the government’s request for €35 million in this week’s vote, while opposition parties DISY and EVROKO are likely to table an amendment whereby Eurocypria will receive just €10 million this year from the government. Under this scenario, having proved its viability this year, the company could then apply to the banks for refinancing in 2011.
