Eurocypria scrambles for loans in bid to stay afloat
By Jean Christou
STATE owned charter airline Eurocypria is in serious financial difficulty but will seek loans to keep it afloat through the current financial crisis, Finance Minister Charilaos Stavrakis said yesterday.
The Minister was speaking after a meeting with Eurocypria’s new chairman, former banker Lefteris Ioannou, and the airline’s board.
Ioannou was appointed by the cabinet on Tuesday to replace technocrat Lazaros Savvides the Permanent Secretary of the Interior Ministry.
“The company faces serious and immediate financial problems,” said Stavrakis.
“There are pressing needs for payments to be made in the coming days. Already the new chairman has begun a series of contacts with banks and co-operatives to ensure loans for the company so that it can meet its needs,” he said.
Stavrakis said all financial help would be in compliance with EU rules, which forbid direct state aid to airlines.
The Minister said Eurocypria had an extremely important role in bringing tourists to Cyprus. The airline’s share of the incoming market was around 15 per cent, which translates into some 300,000 tourists.
He said it would be unthinkable in the circumstances for the government not to support every means of bringing more visitors to Cyprus.
Stavrakis also expressed his full confidence in the new chairman, saying he was confident Ioannou would do a good job in helping Eurocypria’s recovery and survival in the “really difficult times ahead”.
The Minister also thanked Savvides for the valuable service he had performed as non-executive chairman.
Asked whether there was a likelihood that a strategic investor might step in, Stavrakis said negotiations with such an investor would have to be made from a point of strength and not weakness, which characterised Eurocypria today.
“The challenge for us is for the airline to survive and I am sure that the new chairman and board will make their own decisions on strategic planning for the future,” said Stavrakis.
The measures to be taken in the meantime would not be announced, Stavrakis added, when asked whether there would be layoffs at the airline.
Ioannou said the situation was not an easy one, particularly given the international economic climate.
“However, with the support of the government, and the correct handling, the company can survive and continue its important work,” he said.
Two weeks ago, Eurocypria’s 65 pilots issued a vote of no confidence in management and asked the government to replace the board.
The pilots listed a catalogue of alleged mismanagement of the fleet and of network routes, which they said had brought the company to the brink of collapse.
Eurocypria has been experiencing a number of difficulties since the government purchased the airline from national carrier Cyprus Airways in 2006.
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