12/01/2011 07:16
The Finance Ministry is examining scenarios for the state support of Cyprus Airways with €20 million, as an offset to the losses that the national carrier is suffering in the past few years for the additional expenses that the prohibition of the flights over Turkey entails.
This scenario seems to gain ground by the President and DIKO, on condition that it will be approved by the European Union and there will be cutbacks in the expenses and the salaries.
The Company is expected to suffer losses of €30 million in 2010 and it will face liquidity problems if no drastic measures are taken by May.
CAIR, which was supported by the taxpayers in 2005 with state guarantees and a capital injection of €17.5 million, currently has negative capital.
Finance Minister General Manager, Christos Patsalides told StockWatch yesterday that at a meeting at the Presidential Palace on Monday, the Finance Minister – in the presence of CAIR Executive Manager – informed President Christofias on the study that the Management prepared according to which the new arrangement of flights – and the abolition of some of them – will save around €30 million.
“During the meeting, all scenarios were under examination as well as the possible strengthening of CAIR with the sum of €20 million, which corresponds to losses in the past 6 years from the flights that they are forced to execute due to Turkey’s embargo”, Mr. Patsalides said, responding to StockWatch’s questions.
Also, he explained that the economic strengthening of CAIR is conditional. “The conditions concern the Company’s restructuring so as to become profitable, since the European Union does not allow the granting of a state subsidy to a loss-making public company that competes with private companies.
According to what has been said by persons who attended the meetings with the government officials, the sacrifices asked by the government include a measure taking of €5-7m, the reduction of the number of employees by 150-200 and the cut in the salaries of the highly-paid, especially the pilots so as to secure the Company’s viability in the long-term and the government to safeguard the EU consent.
The government’s decision will act as the kingpin of pressure on the pilots so as to withdraw the legal actions against the government after the adoption of the previous survival plan.
“The Company’s staff is ready to make sacrifices so that the Company comes out of the stalemate and deal with the harsh competition”, SYNIKA General Secretary, Andreas Pierides stated.
“SYNIKA will propose the cut of 10% of the monthly salary of all staff for a year, which is expected to save €5-6 million and the early retirement plan of 150 employees”, he said.
The government’s views will be transferred to the employees by the Executive Chairman, Costas Mavrocostas during the meeting early in the morning in the presence of two representatives from each one of the five trade unions.
Yesterday in Parliament, Mr. Mavrocostas warned that if no measures are taken, the Company’s lifeline is short.
This scenario seems to gain ground by the President and DIKO, on condition that it will be approved by the European Union and there will be cutbacks in the expenses and the salaries.
The Company is expected to suffer losses of €30 million in 2010 and it will face liquidity problems if no drastic measures are taken by May.
CAIR, which was supported by the taxpayers in 2005 with state guarantees and a capital injection of €17.5 million, currently has negative capital.
Finance Minister General Manager, Christos Patsalides told StockWatch yesterday that at a meeting at the Presidential Palace on Monday, the Finance Minister – in the presence of CAIR Executive Manager – informed President Christofias on the study that the Management prepared according to which the new arrangement of flights – and the abolition of some of them – will save around €30 million.
“During the meeting, all scenarios were under examination as well as the possible strengthening of CAIR with the sum of €20 million, which corresponds to losses in the past 6 years from the flights that they are forced to execute due to Turkey’s embargo”, Mr. Patsalides said, responding to StockWatch’s questions.
Also, he explained that the economic strengthening of CAIR is conditional. “The conditions concern the Company’s restructuring so as to become profitable, since the European Union does not allow the granting of a state subsidy to a loss-making public company that competes with private companies.
According to what has been said by persons who attended the meetings with the government officials, the sacrifices asked by the government include a measure taking of €5-7m, the reduction of the number of employees by 150-200 and the cut in the salaries of the highly-paid, especially the pilots so as to secure the Company’s viability in the long-term and the government to safeguard the EU consent.
The government’s decision will act as the kingpin of pressure on the pilots so as to withdraw the legal actions against the government after the adoption of the previous survival plan.
“The Company’s staff is ready to make sacrifices so that the Company comes out of the stalemate and deal with the harsh competition”, SYNIKA General Secretary, Andreas Pierides stated.
“SYNIKA will propose the cut of 10% of the monthly salary of all staff for a year, which is expected to save €5-6 million and the early retirement plan of 150 employees”, he said.
The government’s views will be transferred to the employees by the Executive Chairman, Costas Mavrocostas during the meeting early in the morning in the presence of two representatives from each one of the five trade unions.
Yesterday in Parliament, Mr. Mavrocostas warned that if no measures are taken, the Company’s lifeline is short.
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