Locust, there has been no recent news about further developments, as reported by the english-language Cyprus press.
But, reading the other articles regarding the rebranding of Helios and about the accident report due out soon, it is obvious that there is a big shakeup in the Cyprus CAA. They must get things up to speed, if they are to become a southern European base for Arab airline operations.
Also, while I am not privy to any behind the scenes negotiations and know nothing concrete about this, if I were involved with the Greek CAA (not Cypriot), I would approach the Arab airlines and offer Athens as an even better alternative for them. I wonder if the Greek government has thought of this!