Off the wire
• Displaced Syrian children in Lebanon get help to survive bitter storm  • Feature: Cameron, Osborne bid to woo northerners with promises of better times ahead  • Council of Europe pays homage to Charlie Hebdo victims  • WHO: Two Ebola vaccines deemed acceptably safe  • (Recast) Britain congratulates new Sri Lankan president  • FTSE 100 falls by 1.05 pct on house builders drops  • Britain congratulates new Sri Lankan president  • New head of Portuguese immigration service sworn in  • Euro cash exceeds national currency in circulation in Lithuania  • Spain's industrial production falls by 0.1 pct in November  
You are here: 　 Home

2nd LD Writethru: Cyprus Airways closes down after EU ruling on state assistance

Xinhua, January 10, 2015 Adjust font size:

Cypriot national air carrier Cyprus Airways was closed down following a European Commission ruling on Friday that it had illegally received state aid.

Ministers of Finance Harris Georgiades and Communications Marios Demetriades said at a joint press conference that the license of the government-owned company has been revoked and its flying program terminated with immediate effect.

They also announced alternative arrangements for Cyprus Airways passengers following the termination of the ailing carrier's operations.

"These alternative arrangements ... are possible to include the use of chartered airplanes, the transportation of passengers with another airline to his/her destination ... or any combination of the above," they said in a statement.

The decision to immediately shut down the Cypriot national air carrier, which was established in 1947, came after the European Commission announced that Cyprus Airways would have to pay back about 100 million euros (118 million U.S. dollars) in state aid it has received since 2007.

"Cyprus Airways needs to pay back all incompatible aid received," EU Competition Commissioner Margrethe Vestager said.

The Commissioner ruled that the state aid gave the company an undue advantage over its competitors in breach of EU rules.

The Commission also found that Cyprus Airways "had no realistic perspective of becoming viable without continued state subsidies" and that injecting more money into the company would not achieve a turn-around.

Government spokesman Nicos Christodoulides had said earlier that the government had 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.

Several staff members gathered outside Cyprus Airways headquarters in protest at its closure as the Board met inside the building to plan its winding down.

Cyprus Stock Exchange had announced that it decided to delist the company's shares as of Jan. 13 after it 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