THE DISMANTLING of state-owned airline Eurocypria began with a silver lining yesterday as the newly-appointed liquidator hinted that strategic investors from Israel have shown an interest in performing a rescue operation.
The airline’s liquidator, Chris Iacovides, who has only just taken on the job, told state broadcaster CyBC that Israeli strategic investors have expressed interest in rescuing the charter airline.
Iacovides said he will meet the investors in the coming days. If agreement is reached with the investors, and the proposed “scheme of arrangement” is approved by the airline’s shareholders and creditors, then Eurocypria will move out of liquidation, he said.
If negotiations should fall through, then Iacovides will proceed with the airline’s liquidation.
All but ten of Eurocypria’s employees are due to receive letters notifying them of the termination of their employment today. The ten will remain in position for the next few weeks.
“Our aim is to reduce the costs but maintain the possibility of the company operating once again,” said Iacovides.
The liquidator told the state broadcaster that Russian travel agents have shown a lot of interest in the airline’s rescue.
On Monday, hoteliers and travel agents called on the state as well as Cyprus Airways (CY) to help the ailing tourism sector, which they said has deteriorated further with the demise of Eurocypria.
President of the Association of Cyprus Travel Agents (ACTA) Victor Mantovani said Eurocypria’s bankruptcy had led to serious problems for tourism with tourism from Germany being mostly affected.
Commerce Minister Antonis Paschalides said last week that the government was prepared to lose a certain percentage of the German tourism market rather than spend “excessive amounts” of money luring them back.
Meanwhile, Eurocypria employees were paid last Thursday their November salaries, the percentage of their 13th salaries, and cashed out their provident fund. A redundancy package remains to be negotiated between unions and the government for the some 300 Eurocypria workers now out of a job.
Eurocypria – which received a €35 million cash injection earlier this year to survive – was set up by Cyprus Airways in 1991 as a charter airline. It is 100 per cent state owned, having been bought by the government from the national carrier some five years ago.
The current administration recently decided the company was no longer economically viable.
Earlier this month the European Commission rejected a proposal for the airline to merge with, or be absorbed by, the national carrier Cyprus Airways and specified that Eurocypria staff could only be compensated after liquidation. The Commission banned the government from assuming Eurocypria’s obligations, before or after the liquidation.
