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CAIR to close without state aid

21/02/2011 14:19
Finance Minister, Charilaos Stavrakis stated on Monday that Cyprus Airways will close if no state aid is granted, stressing, however, that even with the injection of €20 million their future is still uncertain.

Speaking before the Parliament, which is called to approve the supplementary budget of €20 million for the support of the national carrier, Mr. Stavrakis said that CAIR run the risk of closing by April, if the budget is not approved.

The support is an offset to the Turkish embargo over the country’s air space since 2004.

Speaking after the ex-officio session, the Minister emphasized that if the Parliament does not approve the state aid, the Company will close. “More than a thousand employees will lose their job, while the impacts on tourism and the economy will be serious”, he said.

Referring to the Turkish embargo, he talked about “a significant distortion of competition since all other competitors have no problem and may fly in many destinations in Moscow and St. Petersburg mostly with less fuel cost and less time”.

“Besides, the state aid of €20 million doesn’t mean that the company will be able to solve its diachronic problems”, he said.

The problem is here

“The external environment is very difficult it is likely that the company will face more problems in the near future. We have no other choice, taking into account the negative impacts on the economy. Our proposal is that the company must be boosted”, he said.

However, Mr. Stavrakis said that the European Commission has already been sent a pre-announcement of the intention and avoided answering whether an answer should be secured before the release of the sum.

“In Cyprus, when you support financially a state or private company, the government runs the risk of being reported to Brussels. It is a risk that we should take into account but our stance remains the same”, he said.

“Besides, the right for a state aid concerns only those airlines that are currently in operation, that is, Cyprus Airways”, he said.

Emphasizing that neither Eurocypria nor Helios will receive compensations, he added that if a new Cypriot company is established and has a similar problem, it will be compensated.

Responding to the question about the strategic investor, he stressed that this is an issue of political decision. “At the current stage, no such decision has been taken”, he said.

On behalf of the trade unions, SYNYKA SEK Chairman, Andreas Pierides said that Brussels have consented verbally.

He also expressed the hope that the bill will be approved by the Parliament on Thursday.

“Cyprus Airways have a future and this sum raises hopes for the company to generate profits”, he concluded.