CYPRUS Airways, the island’s national airline, may look for alternative ways to by-pass Turkey’s ban on air traffic from Cyprus if this is what really threatens its viability, economist Bernard Musyck said.
The government’s plan to rescue the company it owns by 70 per cent by injecting in it €20 million cash in the form of compensation for additional costs incurred from Turkey’s airspace ban, will not solve the national carrier’s main problem, Musyck, an expert in aviation economics, told the Sunday Mail in an interview.
If the problem were really the additional cost of having to fly around Turkey, “the airline could look at alternatives such as code sharing and subcontracting to carry out its regular flights to Moscow and St Petersburg,” Musyck, who also teaches economics at Frederick University said. “However, that is not the problem. The problem is that it is part of the wider public service”.
Finance minister Charilaos Stavrakis who is a proponent of giving taxpayer money to ailing airlines, said that “technical problems” prevent the company from entering code sharing agreements for the said flight routes.
The minister declined to explain the nature of these “technical problems”. Cyprus Airways was unavailable for a comment when the Sunday Mail tried to inquire whether the company had sought cooperation with other airlines to circumvent Turkey’s air traffic ban and what kind of technical problems could prevent it from entering such an agreement with another airline.
The company agreed with trade unions on an annual 40-million-euro cost cutting plan on February 18, which includes a 9 per cent wage cut and redundancies.
But, even this plan together with the 20 million euro cash injection may not be enough to guarantee its viability due to fierce competition in the aviation ministry, according to the finance minister.
Still, the company embarked on a publicity campaign to assure its clientele that it will not only continue to be viable in the future but it will also return to profitability.
“The board of directors, management, and entire staff of Cyprus Airways have been working tirelessly,” executive chairman George Mavrokostas said in an emailed newsletter.
Should something still go wrong, it would not be related with the way the company operates.
“Difficulties created by mainly external circumstances” would be to blame, he said.
