CYPRUS Airways (CY) unions will urge their members to accept a package of measures aimed at rescuing the ailing airline, which includes cuts in revenues and shedding 140 jobs, it emerged yesterday.
CY yesterday handed unions the outline of a rescue plan drafted by the board that effectively complements a proposal by the labour ministry’s mediating service and includes a 9.0 per cent cut in income for one year, with conditions for low wage earners.
We will “inform people (about the plan) and the advice we will give is that – it is a one way street – this plan must be approved,” said Andreas Pieridis, representative of the airline’s biggest union CYNIKA that has around 900 members.
The airline’s five unions, which represent the company’s around 1,200 staff, will hold meetings today and tomorrow.
The plan is part of a combined effort by the company to save €30 million and the workers to pitch in another €12 million though pay cuts and redundancies. Around €5.0 million will come from redundancies.
The government has also agreed to inject an additional €20 million to assist CY, in the form of compensation for the extra cost incurred by the airline since 2004 due to a ban of using Turkish airspace.
According to the rescue plan, the government will continue to cover the annual cost of that ban for as long as it is in place.
Speaking on state radio yesterday morning the airline’s CEO highlighted the gravity of the situation.
“If we do not take any measures then CY does not have a future,” said company CEO Giorgos Mavrocostas. “At the moment the company has cash flow to last a few months.”
Mavrocostas said the state’s cash injection gives the airline some time to take the necessary measures in a bid to make it viable.
The government’s cash would need the approval of parliament.
Mavrocostas said the effort would now be to find volunteers who would take early retirement in order to avoid forced dismissals.
The redundancies will come from all departments in the airline and its offices abroad, Mavrocostas said.
Apart from the redundancies and cuts in workers’ incomes, the measures include scrapping loss-making flights, limiting the use of one of the two long-range A330 aircrafts with a view to leasing it and putting a freeze on new hires unless it’s absolutely necessary. CY also plans to shut a number of offices abroad whose operation will be assigned to general representatives.
The company said it will also implement a fuel management plan to achieve savings in consumption of up to 3.0 per cent, while management and staff will try to cut overtime by 30 per cent and sick leave by 40 per cent.
The actual figures were not immediately available.
Workers with an income of up to €2,000 will have the first €500 exempted from the 9.0 per cent cut. The cut will not apply to the Christmas bonus and will not affect employees’ pensions.
