CYPRUS Airways (CY) management yesterday stressed its determination to see through an action plan calling for hundreds of redundancies in a last-ditch bid to save the airline, setting the stage for industrial action as airline unions battle to save jobs.
Eleven managerial staff have been axed so far and one demoted while 135 more jobs are expected to go by the end of the month, with another 300 facing redundancy as part of the airline’s radical austerity plan.
According to company figures, the cost of 27 managerial personnel in 2003 reached £1,222,805.
The airline employs 2,122 workers in total, 215 of whom are temporary.
“We stuck our heads in the sand and our bottoms in the air for the past 30 years,” CY chairman Constantinos Loizides told members of the House Finance Committee yesterday.
Loizides briefed the committee on the progress of implementation of the action plan, which the company hopes will save up to £25 million per year.
Discussions are under way with unions, though it looks like an uphill battle for management, who are also having to unravel the legacy of years of political patronage.
Opposition DISY has already charged that most of those who have got the sack so far have been affiliated to the party.
DISY deputy Ionas Nicolaou went a step further yesterday and charged before the committee that one particular name had been removed from the layoff list after a government party leader intervened on his behalf at the last minute.
The same accusations were made by the chairman of the biggest CY union, CYNIKA, who claimed that the layoffs were carried out in accordance with the political affiliations of the employees.
“What we see clearly is that all (layoffs) come from the sphere of one particular political party,” Costas Demetriou said.
Loizides, however, assured the committee that there had not been any party intervention on the issue.
But CYNIKA’s Demetriou also said the layoffs had violated labour relations and that the union has appealed to the Labour Ministry.
He added that it would create problems in the operation of the company and stressed that the union would not allow haphazard solutions.
Concerning the imminent layoff of 135 staff due to the company’s decision to sell two aircraft and cut down on routes, Demetriou said there would not be any dialogue with the government unless certain union conditions were met.
Among others, the unions want to discuss the company’s management structure and the loss-making Athens-based subsidiary Hellas Jet.
The latter was described by Demetriou as a “haemorrhage”, which needed £1.5 million a month from CY in order to keep going.
A company source said CY was looking either to sell Hellas Jet or to enter a joint venture with investors.
Asked how the unions would react if the company pushed ahead unilaterally with the layoffs, Demetriou warned they should be ready to face strikes.
Loizides, however, left little room for manoeuvre.
“If there is no agreement, the airline must perhaps decide unilaterally to adopt measures so we can remain competitive.
“This plan must be adopted,” Loizides said.
Unilateral measures could be taken as soon as November 1, the chairman warned.
Unions do not even want to hear about outsourcing services and wage cuts, though the management is determined to contract out catering, engineering and baggage handling.
A London-based tour organiser making a £500,000 loss annually was also earmarked for closure, the chairman said.
He pointed out that the airline had been losing money every year for the past five years but while other companies were took measures five years ago, CY was just starting now.
A company source said that the company needed a bridge loan from the government but it could not be secured without EU approval.
But Cyprus Airways needed to show the EU that a lot has been done before it could ask for approval, the source said.
Loizides said the action plan should be implemented in its entirety but always taking into consideration the staff and union suggestions that could help increase productivity.
“If there are no radical and painful changes, we’ll have a problem,” company vice chairman Achilleas Kyprianou said.
