By Constantinos Psillides
THE man in charge of Cyprus Airways from 1981 to 1989, Stavros Galatariotis, is mainly to blame for the company’s downfall, former board member Marios Eliades said on Wednesday, appearing before the ad hoc parliament committee set up to investigate the reasons behind the former national carrier’s demise.
Eliades, who sat on the company board when Galatariotis was chairman, said that the former CY boss made a grave mistake when he decided to buy out the 20 per cent share British Airways owned in the Cypriot airline.
During an earlier committee meeting, former company officials had argued that if British Airways kept its 20 per cent stake, decisions to expand the fleet, increase the workforce and closely work with the government would never have taken place.
Galatariotis was also accused of not heeding to warnings regarding the liberalisation of the airline industry and that CY wouldn’t be able to compete with other airlines once the island joined the EU.
“I urged Galatariotis not to take British Airways out of the picture. His response was that we were going to ‘cypriotise’ Cyprus Airways by removing all other elements. We also discussed the need to modernise and restructure the company to be able to compete in the free market. Unfortunately, the company board ignored all that at the end,” said Eliades.
Olga Eliades, who used to work in the company’s operational department, was also present at the meeting. She told MPs that the company could not survive in a free competition environment because of the bloated payroll and financial decisions that burdened the company.
According to her, CY bought their first two Airbus A320 planes at the price of $100m.
The former CY officials told the committee that the man who brokered the deal between Airbus and Cyprus Airways, Ioannis Christofides, received a commission but that the fee was paid by Airbus and not Cyprus Airways.
Former Central Bank Governor Afxentis Afxentiou, who was Finance Minister at the time, said that the blame should not fall on Galatariotis alone. “There was a government and a board too at the time,” he said.
Statements at earlier meetings of the ad hoc committee heard that Galatariotis took over after a string of scandals forced the former board chairman to resign. It was also said that then President Spyros Kyprianou kept a close eye on the company and that Galatariotis used to visit him regularly at the palace.
Responding to comments saying that people might have received kickbacks to mediate the planes’ acquisition, Afxentiou said that he had heard those rumours before but added that there was never any evidence or proof.
“The offer made by Airbus was the most favourable of those submitted. The government at the time was faced with a dilemma. Either approve the fleet expansion or close down the company. A study was commissioned at the time and found that the company was profitable and that it could service its loans,” he said, adding that the company should have been privatised when Cyprus entered the EU.
Asked about the British Airways buy out, Afxentiou said that he was not involved since he was Governor of the Central Bank by the time.
Afxentiou criticised MPs for setting up the committee, explaining that they lack the knowledge and experience to carry out such a task and that they should hire an expert.
Committee chairman, DISY MP Nicos Tornaritis, told the press that he will request technical support, noting that without it the committee report will be incomplete.
Cyprus Airways was grounded in January, after the EU Commission issued a ruling ordering the company to return some €66m it had received in state aid in 2012.
