25/01/2011 08:47
The government decided to make the state support to Cyprus Airways permanent, according to the survival plan of the national carrier submitted to the trade unions on Monday.
According to the plan, the government will allocate €20 million to CAIR due to the losses that it suffers from the prohibition of its flights over Turkey.
The government also agreed to “cover the cost on an annual basis” for as long as there is an unequal treatment.
The annual sum that the company loses due to the embargo is estimated at €3.5 million and is expected to increase in the next few years since CAIR plans to expand to destinations in Russia, where the demand is high.
Apart from the lump sum of €20 million, the plan includes the drop in operating expenses by €30 million and the restraining of the payroll by €12 million via the cut in salaries and the redundancy.
Contribution of employees
According to the draft, the employees will accept cutbacks in their salaries for 2011 with the prospect to get a raise in 2012 if the company returns to profitability.
In relation to the redundant staff, the Management said that the decision on who will go or stay will be taken by the employees themselves. Overall, 140 employees must withdraw.
The Company also committed that it will not appoint new staff, with the exception of certain specialized positions.
Operating expenses to drop
The decline in operating expenses is based on the rationalization of its flight schedule as follows:
- The direct correlation of the offer of air seats with the demand, so as to increase the occupancy ratio of the flights and to maximize the yield of the fares.
- The abolition of the unprofitable flights, especially those that are not direct.
- The closer cooperation with tour operators from Russia for the increase in tourist arrivals from Moscow and St. Petersburg.
- The decrease in the use of an A330 aircraft and the continuance of deliberations with other airlines in order to reach trade agreements that might bring increased revenues and contribute further to the drop in the Company’s operating cost.
Hermes and offices abroad
The additional measures also include the closing of several offices abroad and the Company’s talks with Hermes for the reduction of the airport charges as the main user of the Cypriot airports.
Critical days for CAIR
The next few days will be critical for the future of the national carrier since the representatives of all 5 trade unions will inform their members accordingly and will ask them to show a spirit of understanding so as to decide who is to use the early retirement plan.
On Friday, the trade unions will send a joint letter to the Labour Ministry so that the bill is submitted to the Parliament right away.
At the same time, the trade unions are having contacts with the parties tomorrow so as to secure their consent to the bill that the government will submit for the release of €20 million.
According to the plan, the government will allocate €20 million to CAIR due to the losses that it suffers from the prohibition of its flights over Turkey.
The government also agreed to “cover the cost on an annual basis” for as long as there is an unequal treatment.
The annual sum that the company loses due to the embargo is estimated at €3.5 million and is expected to increase in the next few years since CAIR plans to expand to destinations in Russia, where the demand is high.
Apart from the lump sum of €20 million, the plan includes the drop in operating expenses by €30 million and the restraining of the payroll by €12 million via the cut in salaries and the redundancy.
Contribution of employees
According to the draft, the employees will accept cutbacks in their salaries for 2011 with the prospect to get a raise in 2012 if the company returns to profitability.
In relation to the redundant staff, the Management said that the decision on who will go or stay will be taken by the employees themselves. Overall, 140 employees must withdraw.
The Company also committed that it will not appoint new staff, with the exception of certain specialized positions.
Operating expenses to drop
The decline in operating expenses is based on the rationalization of its flight schedule as follows:
- The direct correlation of the offer of air seats with the demand, so as to increase the occupancy ratio of the flights and to maximize the yield of the fares.
- The abolition of the unprofitable flights, especially those that are not direct.
- The closer cooperation with tour operators from Russia for the increase in tourist arrivals from Moscow and St. Petersburg.
- The decrease in the use of an A330 aircraft and the continuance of deliberations with other airlines in order to reach trade agreements that might bring increased revenues and contribute further to the drop in the Company’s operating cost.
Hermes and offices abroad
The additional measures also include the closing of several offices abroad and the Company’s talks with Hermes for the reduction of the airport charges as the main user of the Cypriot airports.
Critical days for CAIR
The next few days will be critical for the future of the national carrier since the representatives of all 5 trade unions will inform their members accordingly and will ask them to show a spirit of understanding so as to decide who is to use the early retirement plan.
On Friday, the trade unions will send a joint letter to the Labour Ministry so that the bill is submitted to the Parliament right away.
At the same time, the trade unions are having contacts with the parties tomorrow so as to secure their consent to the bill that the government will submit for the release of €20 million.
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