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Cyprus expects "doom decision" by EC for national air carrier

Xinhua, January 10, 2015 Adjust font size:

Cyprus's government said on Friday that it expects at any moment a ruling by the European Commission that may lead to the closure of national air carrier Cyprus Airways.

Government spokesman Nicos Christodoulides said that a ruling by the EU competition authority that Cyprus Airways had illegally received state subsidies in 2012 and 2013 would lead to the immediate winding down of the air carrier.

"There is some information (about the ruling) that is not positive," Christodoulides told the state television.

However, he said that it would be better to wait until the official announcement of the ruling of the European Commission.

A Commission spokesman said in Brussels that he was aware of press reports about an imminent ruling but he could not make any comment as to the the time the Competition Commissioner would make an announcement.

A ruling that the state aid pumped into the company, totaling 103 million euros (about 123 million U.S. dollars), was illegal, would mean that Cyprus Airways would have to return the money.

But Cyprus Airways, which is owned by the government, has no assets at all, having been forced to sell off all its property, including two coveted time slots at London's Heathrow Airport.

Failure to return the money to the state would make the company insolvent and it will lead to its flying license being invoked.

Christodoulides said the government has been prepared for any scenario, having made plans for the establishment of a new airline in association with the private sector so as to safeguard air communications for the island country.

He also said that the government has made provision for the company's 500-strong staff.

Cyprus Airways has been making losses for years as it was fighting to face competition from low cost air carriers.

Cyprus Stock Exchange has announced that it would delist the company's shares as of Jan. 13 after the company failed to submit preliminary financial statements from 2012 onwards.

Efforts by the government last year to sell Cyprus Airways either to low-cost airline Ryanair or Greece's Aegean Airlines failed as they did not follow their initial expression of interest with firm offers. Endit