09/01/2015 06:52
The suspense about the future of Cyprus Airways is at its highest as the European Commission’s decision on whether the €103 million that the national carrier received in 2012 as an aid for its restructuring is in line with the rules of the state aids, is expected to be out today.
The Commission will also examine whether the new restructuring plan submitted is suitable so that CAIR continues to operate without support from the taxpayers.
The government and the employees of Cyprus Airways are on alert amid leakage of information from Brussels that the decision of the Directorate will be negative.
A presidential source told StockWatch that the Commission's response will be officially given to the Finance Minister, Charis Georgiades today.
Yesterday, the government sent to the EU the updated rescue plan of the company, approved by the Government, as the major shareholder. At the same time, a second rescue plan has been sent by the trade union of the pilots, in a last attempt to keep the company alive.
The chances to approve any of the two plans appear to be remote, as in 2012 the company received support of €103 million, only a few years after the support it received in 2007.
The Committee has been reviewing the issue in depth since February 2014, considering that the restructuring aid of a national carrier twice in a decade is not in line with the rules of fair competition.
A senior government official told StockWatch that an acceptance of the updated rescue plan and a positive decision from the EU would be a big surprise.
Besides, the position of the EU Commissioner, as formulated and published in the minutes of the meeting under President Anastasiadis for CAIR is recent.
The Commissioner left no room for positive expectations for the company and especially to its major shareholder, the state.
If today’s answer is negative, CAIR will have to return the amount of €103 million or part of it to the state.
This is impossible according to the financial data of the company. Therefore, it will be led to closure.
Its liquidity will be used for the repayment of tickets bought by passengers and the repayment of part of the credits received from associates. The state is expected to provide some compensation to the employees for the loss of jobs. There is a relevant provision in the budget, although the relevant fund was pledged by the House Finance Committee.
Minister of Communications and Works, Marios Demetriades noted that CAIR will cease to operate if the updated rescue plan is not passed.
The state has 94% stake in CAIR which operates since 1947. In the past two years, the carrier is kept alive by selling assets. Recently, they sold their emblem to the Republic.
The Communications Ministry stressed that if CAIR closes, there are other companies to fill the connectivity gap. Yesterday, Aegean announced flights from Larnaca to Kiev and Tel Aviv.
The Commission will also examine whether the new restructuring plan submitted is suitable so that CAIR continues to operate without support from the taxpayers.
The government and the employees of Cyprus Airways are on alert amid leakage of information from Brussels that the decision of the Directorate will be negative.
A presidential source told StockWatch that the Commission's response will be officially given to the Finance Minister, Charis Georgiades today.
Yesterday, the government sent to the EU the updated rescue plan of the company, approved by the Government, as the major shareholder. At the same time, a second rescue plan has been sent by the trade union of the pilots, in a last attempt to keep the company alive.
The chances to approve any of the two plans appear to be remote, as in 2012 the company received support of €103 million, only a few years after the support it received in 2007.
The Committee has been reviewing the issue in depth since February 2014, considering that the restructuring aid of a national carrier twice in a decade is not in line with the rules of fair competition.
A senior government official told StockWatch that an acceptance of the updated rescue plan and a positive decision from the EU would be a big surprise.
Besides, the position of the EU Commissioner, as formulated and published in the minutes of the meeting under President Anastasiadis for CAIR is recent.
The Commissioner left no room for positive expectations for the company and especially to its major shareholder, the state.
If today’s answer is negative, CAIR will have to return the amount of €103 million or part of it to the state.
This is impossible according to the financial data of the company. Therefore, it will be led to closure.
Its liquidity will be used for the repayment of tickets bought by passengers and the repayment of part of the credits received from associates. The state is expected to provide some compensation to the employees for the loss of jobs. There is a relevant provision in the budget, although the relevant fund was pledged by the House Finance Committee.
Minister of Communications and Works, Marios Demetriades noted that CAIR will cease to operate if the updated rescue plan is not passed.
The state has 94% stake in CAIR which operates since 1947. In the past two years, the carrier is kept alive by selling assets. Recently, they sold their emblem to the Republic.
The Communications Ministry stressed that if CAIR closes, there are other companies to fill the connectivity gap. Yesterday, Aegean announced flights from Larnaca to Kiev and Tel Aviv.
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