THIS YEAR promises to be a year of change for Cyprus Airways (CY) with the planned closure of all foreign branches, replacement jets and a management reshuffle.
The company, which is expected to report 2009 losses of between €3 million and €4 million, has already closed its Brussels office and will examine the closure of others individually throughout the year. Kyriakos Kyriakou, CA Spokesman, said yesterday “We examined the situation in all our stations and we came to the conclusion that it is financially better for us to close some. We think that by closing the offices we can save several million Euros.”
CY currently has offices in Paris, London, Frankfurt, Zurich, Milan and Vienna, which cost a lot in rent, salaries and maintenance. Their largest overseas office is in Athens. Kyriakou said “We have only closed the Brussels office so far, and will examine each case at a suitable time.” This move will inevitably mean more job losses throughout Europe. Asked about the provision for ex employees, Kyriakou said “There were three employees in the Brussels office and all will receive compensation.” CY plans to replace the closing offices with a single representative in each country.
This month the airline will take delivery of the first of three replacement Airbus A320 jets. The second and third will come into service in February and May and instead of being purchased outright, the jets will be rented on six year leases. This is a more economical method of maintaining a modern fleet since the global economic crisis brought down hire costs.
It has been reported in that the planes being replaced will be sold and used for spare parts. However, last month CY signed a letter of intent to sell one of the aging A320 aircraft for USD$6.1 million to the Kyrgistani airline, Eastok Avia. “We will begin investigating how to rebuild the rest of the fleet in the near future,” said Kyriakou.
Finally, the leadership of the company looks set to undergo something of a reshuffle in 2010. Although Executive Chairman Kikis Lazarides has been granted an indefinite extension of his mandate, he will step down into a non-executive chairman role on appointment of a new managing director. Kyriakou said yesterday that CY has received around 30 applications for the position, though he was unable to confirm when the recruitment process might be completed.
