VCy From Cyprus, joined Dec 2012, 267 posts, RR: 0 Posted (2 years 3 months 2 days 15 hours ago) and read 15777 times:
http://www.sigmalive.com/inbusiness/news/business/38707 sorry the article is in Greek. one of the important fact that its states is that there is interest for the airline from the Middle East and China as well.
Also, yesterday it was reported that there was 3 other scenarios. One was to close it down immediately, the other one was to help it survive for the summer season and the last one was to reduce the aircraft to 6 and sack reduce its staff.
What are your thoughts?
konrad From United States of America, joined Mar 2002, 552 posts, RR: 0
Reply 5, posted (2 years 3 months 2 days 10 hours ago) and read 15241 times:
Quoting VCy (Reply 3): Its a chinese company that s in the airline industry according to the latest information. They have been negotiating for the past 15 days apparently. Will upload the link soon, but its in Greek.
As Cyprus Airways are an EU airline there is a limit of less than 50% on non-EU ownership.
The government of Cyprus owns 69.2% of the airline, so even if they sell 49% to the Chinese they will have 20% stake in the airline. I doubt they would make the life of the Chinese difficult. I am sure they would provide them with the necessary majority when needed.
OA260 From Ireland, joined Nov 2006, 28332 posts, RR: 60
Reply 7, posted (2 years 3 months 2 days 9 hours ago) and read 15083 times:
We should know the answer tomorrow. The Chinese investors are the only ones who seriously seem interested and they are chewing over the deal apparently and are to come back to CY management with their final decision by tomorrow latest.
Basically if the Chinese are not interested then its curtains for CY unless another last minute buyer shows up.
CYatUK From United Kingdom, joined Apr 2006, 812 posts, RR: 0
Reply 8, posted (2 years 3 months 2 days 9 hours ago) and read 15066 times:
Quoting JU068 (Reply 6): The government of Cyprus owns 69.2% of the airline, so even if they sell 49% to the Chinese they will have 20% stake in the airline. I doubt they would make the life of the Chinese difficult. I am sure they would provide them with the necessary majority when needed.
I think that the above has changed after the last issue of rights when the Government exercised (proportionally) more rights than the private sector owners who owned the remaining 30.8%.
In any case, I think that a split of 50% - 1 share for the Chinese Investor, 20-25% for the Government and a 25-30% for the remaining/existing private investors could be beneficial for the airline.
If a deal is to go ahead, a LOI will be signed during the weekend.
raffik From United Kingdom, joined Feb 2006, 1733 posts, RR: 4
Reply 9, posted (2 years 3 months 2 days 8 hours ago) and read 15035 times:
Very interesting. I know that MEA was considering purchasing the airline last year but with the Cypriot economy as it is I think it would be a hefty burden for an airline the size of MEA.
I think the airline should close down and rebrand as a low cost airline- like the huge majority of airlines serving the island.
A few A320s for key European routes and then Dash8 Q400s for a regional operation which could include Athens, Istanbul, Cairo, Beirut, Amman which then feed into their daily A320 ops to Europe. I am rather impressed with Pegasus' Airlines operations in Istanbul.
In the summer months when their is an increase of traffic they could lease in additional A320s for the summer season only. That way they won't have such an overstocked fleet when the winter months come around
LAXintl From United States of America, joined May 2000, 27183 posts, RR: 50
Reply 13, posted (2 years 3 months 2 days 6 hours ago) and read 14858 times:
No matter who opt to buy the ailing carrier, Cyprus Airways needs a major overhaul.
Business as usual clearly does not work, and the carriers needs a new business strategy to better align with the stark market realities of being based in an incredibly seasonal home market, and under constant competition from low cost competitors.
Frankly I doubt a minority owner (especially one without airline experience) will have much power to change things as long as the government is involved and unwilling to make the tough decisions including staff and cost cuts to allow the carrier a clean sheet of paper to work with.
[Edited 2013-04-05 09:08:47]
From the desert to the sea, to all of Southern California
The government is desperate enough and I am sure they will not pose any problems to the new owners. They are getting ready to introduce harsh measures in all government institutions so I am sure that Cyprus Airways is no different. Plus, the position of the government has been a clear one, people needed to be fired and contracts needed to be revised.
DutchBoeing From Netherlands, joined Apr 2010, 111 posts, RR: 0
Reply 20, posted (2 years 3 months 1 day 15 hours ago) and read 13633 times:
I understand they need cash now, but is it wise on the long run to sell the LHR-slots? I suspect (don't know, just a hunch) that LHR is one of the few routes they actually make money on. LCA-LHR must be pretty big or is there too much competition on LON-LCA from lcc's? Then it is the last route to axe I would say. But I understand they need to do something... Would they leave LON altogether or just switch to i.e. STN?
On a side note: I really hope they will keep the dedicated business class seating. One of the few airlines in EU that still has those. Would be a shame if another carrier gets rid of proper C-class seating. Apparently there really is no market for them in EU anymore. That only leaves RO, JU and SU? If you can count SU as EU of course and I believe JU is also getting rid of them with their new interiors. Any other ones still have them?
VCy From Cyprus, joined Dec 2012, 267 posts, RR: 0
Reply 21, posted (2 years 3 months 1 day 15 hours ago) and read 13625 times:
Quoting DutchBoeing (Reply 20): I suspect (don't know, just a hunch) that LHR is one of the few routes they actually make money on. LCA-LHR must be pretty big or is there too much competition on LON-LCA from lcc's?
The LON-LCA market is huge and CY has recently entered an agreement with VS to transit passengers to the USA through LHR. I have never flown on a CY flight to LHR without the flight being close to full, therefore i have no idea why they would do that. There is alot of competition by lccs, such as Easyjet & Monarch but no one can use them to transit, and Cypriots seem to prefer LHR. I would believe they would be better off giving up their Rome slots and let A3 pick up the route. And for sure the Frankfurt and Munich as i don't see the market being that big and the capability of CY to compete with LH. I think another good move would be to give their CDG route to AF & AMS to KLM. However, not everything should happen, cause if it did then CY would be left only with its Greece routes
Jat has a mix of them but some of the recently refurbished aircraft lost their dedicated business class seating. They have the demand on some routes, so I think that in the long run only a few aircraft will keep it.
I doubt Cyprus Airways would leave London as the market is massive. However I do not know how wise it would be to move to Gatwick with easyJet and Aegean already competing on this market. I guess we will have to wait and see, but my guess is that London Heathrow is here to stay.
If I remember correctly Rome is quite cheap as an airport to fly into, at least cheaper than some other European airports. Maybe that is one of the reasons why Cyprus Airways sought to establish this partnership with Alitalia. In addition to this, there is a market between Larnaca and Rome, Cyprus Airways sells most of its seats to Italian tourist agencies. This is why one of Ryanair's first destinations out of Larnaca was Bologna, a lot of people used this flight to visit Rome.
Mind you, Cyprus Airways has been sending their A321 to Frankfurt a few times, so the market is there. Unfortunately for Cyprus Airways most of those passengers are low-yielding tourists coming to sun tan on the Cypriot beaches.
I flew at least 8 times on Cyprus Airways from Larnaca to Amsterdam and most of those flights used to be the horrible ones that would stop in Paphos. In Larnaca we would be around 10 to 20 passengers while the flight out of Paphos would leave completely full, mostly with elderly Dutch people. I do not know what impact the removal of Paphos from their network had on their loads but I hope their flights are carrying more passengers than those times I flew on them out of Larnaca.
CY's primary problem is its cost structure. Only by fixing it they can actually make a profit by flying tourists in and out of Cyprus.
DutchBoeing From Netherlands, joined Apr 2010, 111 posts, RR: 0
Reply 23, posted (2 years 3 months 1 day 14 hours ago) and read 13562 times:
Quoting VCy (Reply 21): However, not everything should happen, cause if it did then CY would be left only with its Greece routes
That would have an 'OA-scenario-reek" to it... (OA recently having axed all A320's and being an all prop-airline now, what a shame).
What tough decisions to make now, esp. with the local economy to be spiralling down. One of the scenario's to save CY is for it to be bought by another airline (or investment group), as has been mentioned above. What can it offer other airlines? What can CY cash in on? There is so much competition in the region. Additionally, CY's network isn't very strong and frequencies on all routes are relatively low (most 1 x daily). I also don't think they have a very strong brand recognition in the North of EU. It is not an airline which comes to mind to most people when they need to go to AMM/CAI/BEY/etc. I would say. They lack the exposure of an alliance and they lack being part of a large FF-program like FB or M&M. Perhaps joining one of those would suddenly persuade more people to notice and use them? I know it is silly, but... it's nowadays not always the best (i.e. fares, service, routes) airlines that win, it usually is the one with the best / strongest FF-program. Look at all major airlines in the world compared to the boutique ones. It is the large bland ones what seem to win. So their loyality base doesn't seem very large. Locally it probably is, but the way the local economy is going... So why would anybody want to invest in CY? What can be the benefit in the long run?