Cyprus Airways closure 'unavoidable', government says
Photo Konstantin von Wedelstaedt
(NICOSIA) - Cyprus defended on Saturday the decision to halt flights by its national carrier, calling the closure of debt-laden Cyprus Airways "unavoidable", as pilots vowed action against the government.
Government spokesman Nicos Christodoulides told state radio that authorities had tried to rescue the stricken carrier, but that its problems were "long standing" and irreversible.
The 68-year-old Cyprus Airways made its last flight on Friday night from Athens to its home base of Larnaca on the island's south coast after EU regulators ordered Cyprus to recover illegal state aid granted to the airline.
Communications Minister Marios Demetriades had warned the airline could not survive if the EU decided Cyprus broke the rules by giving it a 31-million-euro ($37 million) capital increase and a 34-million-euro rescue loan.
Cyprus Airways pilots union chief Petros Souppouris told state radio on Saturday that the government could have bailed out the debt-ridden carrier but "their aim was to close the company".
He added that his union would file an official complaint against the government for the closure.
The carrier, which is 93 percent state owned, has struggled to survive against intense competition on its most popular routes to Greece and London.
Several cost-cutting plans as part of last-ditch survival efforts failed to stem losses.
The airline posted a net loss of 55.8 million euros in 2012, more than double the 23.88 million euros of the previous year.
The EU said money provided to Cyprus Airways by the government had put the airline in breach of its competition guidelines.
"Cyprus Airways has received large quantities of public money since 2007 but was unable to restructure and become viable without continued state support," Competition Commissioner Margrethe Vestager said.
The daily Phileleftheros newspaper on Saturday said the carrier had sealed its fate through "years of bad management, high salaries, super perks and privileges, a bloated workforce, loss making routes and making financially bad decisions".