http://www.hurriyetdailynews.com/n.p...aos-2010-06-22
The fate of the debt-struck Cyprus Turkish Airlines, or KTHY, remained bleak on Tuesday, as the conflict between the Turkish Cypriot government and the local labor union escalated to a new level in the aftermath of the suspension of flights.
Turkey’s Directorate General of Civil Aviation suspended all KTHY flights as of Monday night. The Hava-Sen labor union, organized at the KTHY, staged a strike in the early hours of Tuesday, as flights were canceled. As the strike grounded services, Turkish airline company Pegasus’ flights were also grounded for a few hours.
A KTHY general meeting to debate the fate of the airline was to be held Tuesday morning in Nicosia, but KTHY staff raided the meeting, scuffling with security forces, Doğan News Agency reported. The workers also threw eggs at the vehicles of northern Cyprus’ Prime Minister İrsen Küçük and Transport Minister Sunat Atun.
As the Hürriyet Daily News & Economic Review went to press on Tuesday, the outcome of the delayed meeting was still unknown. KTHY was expected to debate rival offers by Turkish airline companies AtlasJet and Pegasus.
In a written statement, Pegasus Airlines said the firm has offered “to go forward by setting up a new company” and that the offer was accepted “in principle.”
A previous offer from AtlasJet triggered a major scandal earlier this month, when the envelope that included the bid was “lost” afterward.
Pegasus on the scene
“Pegasus could set up a joint company with northern Cyprus,” Anatolia news agency quoted the company as saying.
“Since June 11, northern Cyprus, our chairman Ali Sabancı and our managing director Sertaç Haybat have been conducting meetings, together with Pegasus’ representative Zeki Ziya, on flights from northern Cyprus,” the company said in the statement. “It is imperative that regular and increasing flights from northern Cyprus be conducted for the island’s economy. For this aim, we suggested going forward with a new company that would not be a burden on northern Cyprus and other investors. In principle, this suggestion was accepted but there has not been an official decision.”
The possibility is that Pegasus could set up a joint company with northern Cyprus, the airline said. “Crucial issues to this end are still unknown,” it said. “The most important issue is the correct restructuring of human resources. Employees should not be aggrieved, but competition should also not be disregarded.”
KTHY, the national airline of northern Cyprus, is on the verge of bankruptcy and has a debt burden of around $100 million. Previously a Turkish Airlines unit, KTHY was purchased by the northern Cyprus government in 2005 for $33 million. KTHY owns five jets and has leased another one. It employs 670 people and has representative offices in Turkey, Britain and Germany. It has posted annual losses of $50 million for the past few years.