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Cyprus Airways: The end of an era

09/01/2015 18:06
The end for Cyprus Airways is official.

The European Commission's Directorate-General for Competition just announced its decision to the Cypriot government that the state aid of €103 million received by the national carrier for its restructuring in 2012 was illegal and is not in line with the rules on state aids.

In its decision EU points out that the state assistance granted to CAIR is against EU regulations and must be returned by the company to the taxpayers.

According to the decision CAIR had no chance of becoming viable.

The directorate requires from CAIR to return to the state all illegal aids received in 2012.

The CAIR administration has taken all necessary measures so as not to leave passengers of its flights of the next few days exposed. All relevant arrangements have been made with various travel agencies in Cyprus and abroad.

Compensations will be granted to all passengers and travel agencies that have booked tickets.

The last meeting of the Board of Directors is now in progress. Among others, it will decide the suspension of the flight schedule.

The last historic flight of Cyprus Airways will take place tonight from Athens to Larnaca.

Right after the flight from Athens, the fleet will freeze forever.

The liquidators will be called to take over the management of the assets still available to the company.

The state will fully compensate the staff and all pension rights will be granted.

The state has reserved the name and emblem of CAIR in case an investor is interested in creating a new company, probably named Cyprus Air.

Perhaps in this new company, if and when established, the state will have a small stake in the share capital.

The EU decision puts an end to an airline which carries behind it 68 years of operation in the skies.

The competent directorate of the EU assessed that the new restructuring plan presented yesterday by the Board of CAIR is not suitable for the carrier to continue to operate without support from the taxpayers.

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.

CAIR, which preceded the establishment of the Republic, were founded in 1947 when Cyprus was still under British rule.