THE GOVERNMENT is studying a plan to restructure 100 per cent state-owned charter airline Eurocypria, which may involve the injection of an additional €35 million in share capital.
Eurocypria CEO Lefteris Ioannou said yesterday that the restructuring plan had been prepared on the basis of a study of the company’s viability carried out by international experts.
Speaking to the press following a meeting with Commerce Minister Antonis Paschalides, Ioannou said that he was “no expert on airlines”, but the study’s conclusion was that the ailing airline could be commercially viable, provided it is restructured and its operations reorganised.
“Accordingly, when the experts speak, the rest should listen”, he added.
Paschalides gave firm support for the company in his own comments to the press, saying that Eurocypria “operates routes which are very significant to Cyprus in terms of tourism.”
Differentiating the charter airline from scheduled airline Cyprus Airways (CY), Paschalides added: “It operates routes from regional airports from which we receive a significant number of tourists. In particular, there is a danger of that number of tourists disappearing if Eurocypria goes, but we are optimistic that with its new plan, Eurocypria has a future and a lot to offer to Cyprus tourism.”
Responding to statements by DISY Vice President Averoff Neophytou to the effect that the island is too small for two airlines and that both CY and Eurocypria face a gloomy future, Paschalides said that “it is not a question of whether a small country can support two airlines, or one or three”.
He added: “On the one hand we support competition, on the other we maintain that Eurocypria operates mainly charter flights, and so mainly serves different destinations – which means that Mr Averoff Neophytou’s assessment is not necessarily correct, although we respect his opinion.”
CY Chairman Kikis Lazarides was scathing regarding the possibility of the government investing a further €35 million in Eurocypria, in comments he made in a strongly-worded letter sent last week to Finance Minister Charilaos Stavrakis, with a copy to Communications Minister Nicos Nicolaides and President Demetris Christofias.
Lazarides wrote: “It is nothing other than exaggerated – if not also unrealistic – to aim to convince anyone of the logic of investing in a company which posts annual losses of more than €10 million, and which bases itself on an out-of-date operating plan sustained by charter flights.”
He added that “the only way to justify such an investment would be a possible change in the company’s strategic plan, with the creation and establishment of scheduled flights, something which would place the company in direct competition with CY and would undoubtedly lead to the ruin of both firms.”
Lazarides maintains that the only viable solution is for Eurocypria to be closed down or absorbed into CY, which – he argues – would give a significant boost to both CY and the government’s coffers.
Stavrakis will be holding a meeting with the boards of the two airlines on Friday, in an attempt to work out a solution that will allow “both to be healthy and to prosper”.
Paschalides said yesterday that he was “sure that with an effort by all those concerned, we can find the ideal compromise for the good of the tourism sector and of the economy in general.”
