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CAIR: Time for drastic measures

07/03/2005 08:14
The Council of Ministers is expected to meet on Thursday to review the latest developments in the national carrier and the resignation of CAIR Vice Chairman, Achilleas Kypianou to the Finance and Transport Ministers.

StockWatch sources reveal that the two Ministers urged Mr. Kyprianou to follow the procedures of the Company’s memorandum.

It is still unknown, however, whether the Vice Chairman will submit his resignation to the Chairman and Secretary of Cyprus Airways. According to sources, the President of the Republic would not like to see a general reorganization in the national carrier for two main reasons:

Firstly, no one would accept to become a member of the Board of Directors. Even if certain technocrats accepted this challenge, it would cause delays in the taking of drastic measures for the drop in the Company’s expenditure, which goes through a crisis.

Secondly, Cyprus President never expressed any complaint about CAIR Chairman, Constantinos Loizides, however, he is particularly concerned about the redundant staff. The action plan for the survival of the national carrier has his blessings.

Minister briefs CY President

It is worth noting that the President had been briefed by the Finance and Transport Ministers on the latest developments and suggested that interventions on issues concerning the Code must be made by the Labour Minister only.

The big dilemma

At the meeting held on Saturday, however, the Finance and Transport Ministers stressed the importance of the enforcement of the action plan for the survival of the national carrier. “Or else the Company will close”, they said.

Flight attendants

As for the redundant 22 flight attendants, the Transport Minister stated that the issue will be handled by the Board of Directors so long as it adopts the necessary procedures.

Liquidity problems

Meanwhile, the Company’s finances have deteriorated. According to sources, £20 million have been blocked by the commercial banks. It is noted that the company had losses of £33 million in 2004.

The Company now expects the decision of the European Union so that the government guarantees its loans.

Trade Unions

The trade unions agree that Cyprus Airways goes through a serious crisis and stated that they are ready to make sacrifices. “If any member of the Board of Directors believes that Cyprus Airways will not survive, it should resign”, SEK and PEO said.

Pilots

Representatives of the Cyprus Airways pilots expressed their readiness to proceed to drastic cutbacks and pioneer alternative solutions in order to keep their posts and noted that they will have contracts with the Transport Minister to evaluate the alternative scenarios.