"A week after state-owned Eurocypria announced the termination of operations, economists say there is little the government can to prevent Cyprus Airways (CY) from a similar fate"- writes the
Cyprus Mail newspaper.
The national carrier, which is 70 per cent state-owned will now pay the price for previous failed corporate decisions and the inflexibility which prevented it from capitalising on its previous restructuring process, said European University economics professor Marios Mavrides.(...)
"The only thing that could currently save Cyprus Airways is to find a strategic investor to inject cash into the company," Mavrides told the Sunday Mail. "But nobody would put money into this company now that its book value is already negative," he added.
Bernard Musyck, associate professor in economics at Frederick University said that as long as the state remains the majority shareholder, the company may not survive, let alone become a success story(...)
"For many years the company offered a convenient place for politicians to arrange jobs for boys," said Musyck, an expert on aviation economics.
He said Cyprus Airways was only one of the very few remaining state-owned airlines in Europe, which was a liability for the carrier.
Cyprus Airways saw its personnel cost rise in 2009 to €71.6 million from €68.8 million in 2008, even after cutting staff by 48 to 1,417. The company reported €3.3 million in losses last year after total revenue fell 20 per cent to €249 million, compared to a €1.7-million profit in 2008.
"There is such fierce competition in the air transport market that no government run company can survive in the long run," Musyck said.