THE SERIOUS interest being shown by a foreign investor in acquiring a minority stake in Eurocypria is proof of the state-owned charter airline’s health and good prospects for the future, Eurocypria CEO Lefteris Ioannou said yesterday.
Speaking at a news conference on “the present and future of the company”, Ioannou said this was “the best possible answer to all those who recently ‘passed judgement’ through various so-called studies that our company cannot survive and has no future”.
“No private investor would want to buy shares in a company that is heading for bankruptcy or has no room for survival,” he said.
Dismissing recent negative assertions “from experts and non-experts, some of whom have conflicting interests”, Ioannou said that the company was in full recovery.
He said Eurocypria had successfully started to restructure its workforce, increased productivity, introduced new flexible sales and marketing methods, become active in new markets, significantly reduced flight delays, reduced costs and improved its financial results.
Ioannou put a positive spin on recent losses, saying that estimated losses for 2009 – “the year of heightened economic crisis” – “will not exceed €13 million”, compared to final losses of around €16 million for 2008.
He said that the reduced losses in 2009 would have been even lower, were it not for “the company’s conscious policy to offer batches of tickets at below cost and to give further concessions, all with the aim of helping the tourism sector and at the same time maintaining Cyprus’ tourism clientele.” The airline also took a total loss of some €5.3 million on forward purchases of oil in 2008 for execution in 2009, and currency fluctuations.
Ioannou said that the airline’s prospects for 2010 were “satisfactory”, as it had already sold 70 per cent of its available seats for the next tourist period, and was in negotiations on two more contracts which would basically account for the rest.
Referring to the argument repeated insistently over recent months by Cyprus Airways (CY) – that there was not room for two airlines in Cyprus, Ioannou said that “a very significant difference” between the two was that Eurocypria’s customer base is almost exclusively tourists, and 80 per cent of the 2,581 flights it operated in 2008 were to destinations not served by CY.
He also said Eurocypria had low operating costs, while at CY the “mindset” was different costs “very high”.
“We should free ourselves from the kind of dilemmas which say either the two companies merge or they both close down,” he said.
Eurocypria’s CEO chose not to disclose the identity of the potential foreign investor – who “operates in the tourism industry” – but said the government would make the final decision on the expression of interest. He did not rule out the possibility of the investor taking a larger stake in the future.
Ioannou said that the government had decided to inject a further €35 million in the form of share capital into the 100 per cent state-owned airline.
