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CAIR layoffs and unilateral measures

04/10/2004 12:41
The Board of Directors of Cyprus Airways expressed its decisiveness on Monday to take unilateral measures for the consolidation of the national carrier if the company does not reach an agreement with the trade unions, CAIR Chairman, Constantinos Loizides said after the presentation of the measures of the Action Plan before the House Finance Committee.

Responding on the questions made by AKEL MP, Giannos Lamaris and European Democracy MP, Prodromos Prodromou on the delay of more than a year for the preparation of the action plan, Mr. Loizides said that it’s been 30 years now that the company has problems and admitted that Cyprus Airways will be able to operate until November.

Measures and savings

Cyprus Airways will be able to save £8 - £11 million if the measures are adopted in their entirety. Those measures concern the change in the flight network and the composition of the fleet (with the revision of the flight network from November 1, the cut down of the fleet and the redundancy of 135 staff with a total annual benefit of £5 - £6 million), the revision of the tariff policy and the reorganization of the company with the re-planning of the operating activities and the undertaking of services by third parties.

As for the reorganization of the Company’s structure, Mr. Loizides said that the Company would like to find a mutual consensus solution with the trade unions in October. “The Company examines the gradual centralization of the services, such as British Airways and Lufthansa, which have hundreds of aircrafts and not the same number of subsidiaries as Cyprus Airways”, Mr. Loizides said, stressing that the profits in the Company’s balance sheet for the past 5 years were attributed to several extraordinary revenues, such as the payment of compensations and the sale of assets.

As regards to the subsidiary of Cyprus Airways, Eurocypria, Mr. Loizides said that the parent company will hire to its subsidiary an aircraft to carry out routes between Crete and other European destinations.

FINMIN rejects appeal

Mr. Loizides also appealed to the government for its contribution to the survival of Cyprus Airways, although the latter rejected his request, stressing that the provision of a financial aid demands the complete adoption of the action plan. It is noted that the latest developments in Cyprus Airways is an issue of great concern for the trade unions, since the securities that have been allocated to the company for loans have dropped to £10 million.

CAIR Chairman, Constantinos Loizides and Vice-Chairman, Achilleas Kyprianou said that the renewal of the fleet was loss-making for Cyprus Airways.

On the other hand, DISY MP, Ionas Nicolaou said that on its annual report the Company announced that the renewal of the fleet would cut down the maintenance expenses.

Responding on the question concerning the Company’s intentions for its subsidiaries, Mr. Loizides said that Cyprus Airways will terminate the operation of Cyprair soon and will find a “final solution” for Hellas Jet. The subsidiary Zenon offers a marginal but stable cost and there is a possibility to establish a joint company with Eurocypria at a later stage.

The House Finance Committee has on its disposal figures on the cost of the managerial staff, the labour cost, the number of employees and the Company’s productivity. The cost for the managerial staff increased from £634 thousand in 1993 to £1.2 million in 2003, while the total cost for the 1858 employees from £27.1 million in 1993 to £50.4 million (2122 members).


Meanwhile, SYNYKA-OHO-SEK has appealed to the Labour Ministry after the layoff of twelve managers as a redundant staff. The Conciliatory Service of the Labour Ministry has organized a meeting between the two parties to examine whether the company has violated the Industrial Relations Code.

In the morning, the SEK General Secretariat of the Semi-governmental Organizations Federation had a meeting with SEK’s General Secretary, Demetris Kittenis to evaluate the latest developments in the national carrier, the dismissal of the twelve managers and the government’s intention to proceed to new layoffs.

On his statements after the meeting, SYNYKA Chairman Costas Demetriou said that the Board of Directors of Cyprus Airways has violated the Industrial Relations Code and insisted that dismissals had a political character. “SEK and SYNYKA will not tolerate unilateral decisions. The government must forget the possibility of a closing”.

However, Mr. Demetriou admitted that the trade unions had received a letter from the Company’s management, which referred to a staff cut by the end of October. According t o StockWatch sources, SEK is expected to ask for a meeting with the Cyprus President, Tassos Papadopoulos, which will be attended by the Finance, Labour and Transport Ministers.