VCy
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Cyprus Airways: Investor Or Close Down

Fri Apr 05, 2013 6:54 am

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?
 
VCy
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RE: Cyprus Airways: Investor Or Close Down

Fri Apr 05, 2013 11:17 am

According to the latest information the airline is very close to being sold, with the possibility of signatures by tomorrow.
 
JU068
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RE: Cyprus Airways: Investor Or Close Down

Fri Apr 05, 2013 11:22 am

Quoting VCy (Reply 1):

Did they say who they are being sold to? Or at least who are the interested parties.
 
VCy
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RE: Cyprus Airways: Investor Or Close Down

Fri Apr 05, 2013 11:46 am

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.
 
JU068
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RE: Cyprus Airways: Investor Or Close Down

Fri Apr 05, 2013 12:04 pm

Quoting VCy (Reply 3):

Great, I guess the Russians are out of Cyprus but the Chinese will step right in to take over. :P

When you have the link please upload it  
 
konrad
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RE: Cyprus Airways: Investor Or Close Down

Fri Apr 05, 2013 12:12 pm

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.
 
JU068
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RE: Cyprus Airways: Investor Or Close Down

Fri Apr 05, 2013 12:58 pm

Quoting konrad (Reply 5):

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.
 
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OA260
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RE: Cyprus Airways: Investor Or Close Down

Fri Apr 05, 2013 1:18 pm

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
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RE: Cyprus Airways: Investor Or Close Down

Fri Apr 05, 2013 1:24 pm

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.
CY@Uk
 
raffik
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RE: Cyprus Airways: Investor Or Close Down

Fri Apr 05, 2013 1:38 pm

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
- Alec
 
JU068
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RE: Cyprus Airways: Investor Or Close Down

Fri Apr 05, 2013 1:41 pm

Quoting raffik (Reply 9):
Istanbul,

Hehe well, they will have to wait a bit until they can deploy their Dash-8 there  
 
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OA260
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RE: Cyprus Airways: Investor Or Close Down

Fri Apr 05, 2013 1:43 pm

Quoting raffik (Reply 9):
Istanbul

LOL... I wonder if we will see MEA in TLV first or CY in IST    
 
raffik
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RE: Cyprus Airways: Investor Or Close Down

Fri Apr 05, 2013 2:13 pm

Quoting OA260 (Reply 11):
LOL... I wonder if we will see MEA in TLV first or CY in IST  

   Woops- probably won't happen then! I don't know why I said IST.. but any similar short haul route would suffice as a substitute to IST!
- Alec
 
LAXintl
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RE: Cyprus Airways: Investor Or Close Down

Fri Apr 05, 2013 3:51 pm

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]
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JU068
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RE: Cyprus Airways: Investor Or Close Down

Fri Apr 05, 2013 4:34 pm

Quoting LAXintl (Reply 13):

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.
 
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OA260
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RE: Cyprus Airways: Investor Or Close Down

Fri Apr 05, 2013 4:55 pm

I think they would have been better with a Gulf carrier who had the funds to inject into the project. Im sure the Chinese will have to get a very good deal to take CY and its issues.
 
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OA260
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RE: Cyprus Airways: Investor Or Close Down

Fri Apr 05, 2013 10:58 pm

Latest updates of things being suggested are as follows :

50% of the workforce to be made redundant.

LHR route axed.

Only 5/6 aircraft to be retained.

Some A320's to be returned to lessor saving EUR1 Million a month on each frame.

Total cost savings of EUR30 Million.
 
LAXintl
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RE: Cyprus Airways: Investor Or Close Down

Sat Apr 06, 2013 4:49 am

Well selling the LHR slots should bring in some money.

Last month we saw Etihad purchase the 3 Jet Airways LHR slots for $70mil.

Suppose CY might get $40mil+ for their 2 daily pairs.
From the desert to the sea, to all of Southern California
 
JU068
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RE: Cyprus Airways: Investor Or Close Down

Sat Apr 06, 2013 6:21 am

I just got an e-mail from them, they are removing the dedicated business class seats. Business class will be kept and the middle seat will be blocked.

It seems that they are expanding their cooperation with Alitalia as they will offer flights from Larnaca via Rome to Geneva, Madrid, Barcelona, Malta, Tunisia and Brussels.

If London Heathrow flights are to be suspended, does it mean their partnership with Virgin Atlantic is over?

[Edited 2013-04-05 23:43:53]
 
VCy
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RE: Cyprus Airways: Investor Or Close Down

Sat Apr 06, 2013 6:49 am

Quoting OA260 (Reply 16):
Latest updates of things being suggested are as follows :

50% of the workforce to be made redundant.

LHR route axed.

Only 5/6 aircraft to be retained.

Some A320's to be returned to lessor saving EUR1 Million a month on each frame.

Total cost savings of EUR30 Million.

i think this is the plan if the deal with the Chinese company fails. it would be a real shame if LHR is axed  
 
DutchBoeing
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RE: Cyprus Airways: Investor Or Close Down

Sat Apr 06, 2013 7:12 am

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
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RE: Cyprus Airways: Investor Or Close Down

Sat Apr 06, 2013 7:21 am

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  

[Edited 2013-04-06 00:22:36]
 
JU068
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RE: Cyprus Airways: Investor Or Close Down

Sat Apr 06, 2013 7:41 am

Quoting DutchBoeing (Reply 20):

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.

Quoting VCy (Reply 21):

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
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RE: Cyprus Airways: Investor Or Close Down

Sat Apr 06, 2013 7:56 am

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?
 
DutchBoeing
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RE: Cyprus Airways: Investor Or Close Down

Sat Apr 06, 2013 7:58 am

Cyprus Airways and Alitalia together, now that sounds like a winning team... The blind leading the deaf!   (sorry...)

[Edited 2013-04-06 01:00:37]
 
JU068
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RE: Cyprus Airways: Investor Or Close Down

Sat Apr 06, 2013 8:16 am

Quoting DutchBoeing (Reply 23):

Personally I always thought that Cyprus Airways is beyond salvation and I do not know why the Chinese want to invest. Naturally, I would be happy if they are bought and if they live to see another day.
China has been investing more and more into Cyprus, you can even see some billboard in Chinese now. There was also talk of launching seasonal flights between Cyprus (I believe they mentioned Paphos) and China. Who knows, let's hope we get some more information today.
 
VCy
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RE: Cyprus Airways: Investor Or Close Down

Sat Apr 06, 2013 8:29 am

Quoting DutchBoeing (Reply 23):
So why would anybody want to invest in CY? What can be the benefit in the long run?

My guess is that they see that in the long run they will benefit from its location. Its located between Europe, Asia and Africa. I know that every single other airline in the region has managed to achieve this and many of you will say there is no space for CY to compete with the likes of TK, EK etc. This will never happen. They can manage to do this on a smaller scale though. You'll probably never see CY flying to North America or South America, but with the correct management you may see them transiting passengers from Europe to Asia and Africa. (We are talking in the long run.) Under the correct management its location may be well taken advantage off to make it as a mini regional hub. Its advantage could be that LCA is much less busier than IST or DXB plus their new owners, most probably Chinese, will be able to make good use of the open air agreements within Europe. Additionally, many may see the potential benefit in the long run when the natural resources are extracted, which will create many jobs, and hopefully, rescue the economy  
 
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OA260
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RE: Cyprus Airways: Investor Or Close Down

Sat Apr 06, 2013 9:31 am

Quoting LAXintl (Reply 17):
Well selling the LHR slots should bring in some money.

Yes so it looks like its a definate source of cash. Shame all the same to have to sell off the Family silver.

Quoting VCy (Reply 19):
i think this is the plan if the deal with the Chinese company fails. it would be a real shame if LHR is axed  

I would expect CY to keep some sort of operation from LTN for the Cypriot North London community and tourist traffic. They can tap into both markets then.
 
GCT64
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RE: Cyprus Airways: Investor Or Close Down

Sat Apr 06, 2013 10:51 am

Quoting JU068 (Reply 22):
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.
Quoting OA260 (Reply 27):
I would expect CY to keep some sort of operation from LTN for the Cypriot North London community and tourist traffic. They can tap into both markets then.

I very much doubt that CY can compete on LON-LCA/PFO route against BA for the high end (efficiently run, FF program, economies of scale etc.) or EZY/MON for the tourist (both efficiently run, compete successfully in incredibly tough markets, economies of scale etc.). It just looks to me like a battle that cannot be won - going up against some of the most effective airlines in the world.

The best for Cyprus (not CY) might be to (a) focus on getting the passengers into Cyprus to spend money and not worrying which airline carries them there and (b) give CY to A3 for nothing and let A3 see what they can salvage (presumably with a requirement that A3 use the LHR slots for Cypriot not Greek flights).
Flown in: A30B,A306,A310,A319,A320,A321,A332,A333,A343,A346,A388,BA11,BU31,B190, B461,(..53 more types..),VC10,WESX
 
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OA260
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RE: Cyprus Airways: Investor Or Close Down

Sat Apr 06, 2013 11:03 am

Quoting GCT64 (Reply 28):
The best for Cyprus (not CY) might be to (a) focus on getting the passengers into Cyprus to spend money and not worrying which airline carries them there and (b) give CY to A3 for nothing and let A3 see what they can salvage (presumably with a requirement that A3 use the LHR slots for Cypriot not Greek flights).

A3 would be mad to take on CY . With the issues that CY have with regards pay/unions it would be a disaster even if A3 were given it for free.

Your right though there are more attractive options with Alliances and FF programs. Mind you BA have been getting alot of negative feedback about their LCA service recently.

Beijing Yi Xiang Da Investment Co Ltd are the company currently chewing over the books and seeing if they are prepared to sign on the dotted line.
 
VCy
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RE: Cyprus Airways: Investor Or Close Down

Sat Apr 06, 2013 4:55 pm

www.sigmalive.com/news/local/38934 according to the article (in greek), the government is trying to connect the island with flights to China and also try and make the island a transit hub "Dubai style", but obviously to a smaller scale.

Quoting OA260 (Reply 29):
A3 would be mad to take on CY .

Agreed. But i think they may be able to launch alot of flights from LCA such as Rome, Milan, Barcelona, Madrid and enter the UK market with more destinations other than the ones already served. BHX, MAN, GLA, DUB and maybe even Liverpool could work from LCA. They could also use LCA to expand their Middle Eastern network.
 
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OA260
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RE: Cyprus Airways: Investor Or Close Down

Sat Apr 06, 2013 5:39 pm

Quoting VCy (Reply 30):
Agreed. But i think they may be able to launch alot of flights from LCA

But would taking over CY enable them to make a go of it? I think they would need to create a new ULCC model and choose their routes carefully. DUB used to have scheduled services with Helios ( not the best example ) but It would be nice to see the link established again even on a seasonal basis. Taking on all of whats left and carrying on CY might not be the best way to go though. In this climate its like the lotto!

A3 could maybe take on some routes as A3 but they have already an ambitious program for 2013 which is either going to make or break them so adding more might be too risky.
 
VCy
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RE: Cyprus Airways: Investor Or Close Down

Sat Apr 06, 2013 5:43 pm

Quoting OA260 (Reply 31):
But would taking over CY enable them to make a go of it?

i didnt mean take over the airline   just take over some routes as A3. And obviously that will mean some CY employees will be able to find a job with A3 (in case it shuts down)
 
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OA260
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RE: Cyprus Airways: Investor Or Close Down

Sat Apr 06, 2013 5:51 pm

Quoting VCy (Reply 32):
i didnt mean take over the airline   just take over some routes as A3. And obviously that will mean some CY employees will be able to find a job with A3 (in case it shuts down)

Yes that might be possible. I do fear though that alot of the former CY employee's would be shed as after a 50% cull it still leaves way too many. Also they look like they will get no redundancy payments. Tough times. A3 would surely have minimal staff requirements for any new routes.
 
VCy
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RE: Cyprus Airways: Investor Or Close Down

Sat Apr 06, 2013 6:18 pm

Quoting OA260 (Reply 33):
A3 would surely have minimal staff requirements for any new routes.

A good thing is that CY's pilots are trained on A320s and A321s as well so that will make it easier i guess. But yes, its fair to say that even at such a scenario the majority of its current employees will be unemployed.
 
JU068
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RE: Cyprus Airways: Investor Or Close Down

Sat Apr 06, 2013 6:37 pm

There is a reason why no one is rushing to established direct links between Cyprus and Dublin. Last year the Irish tourists in Cyprus were the lowest yielding ones, on average they spent €70 per day (Israelis ranked number one with €250).
The flight is long, there is very little O&D and the tourist coming here are not big spenders. I doubt any airline would make a lot of money on this route. Actually, if there was money to be made then I am sure Ryanair would have launched flights to either Larnaca or Paphos by now.

There is no reason why Aegean should take over Cyprus Airways. After all, all they have to do is to wait a few more days and see what will happen with Cyprus Airways. They have crew based here (which I think are actually Greek and not Cypriots) and three A320s which are parked here throughout the winter season. Taking over the routes should not be a problem.
 
VCy
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RE: Cyprus Airways: Investor Or Close Down

Sat Apr 06, 2013 6:48 pm

Quoting JU068 (Reply 35):
(Israelis ranked number one with €250).

woooow that's alot  Wow!
Quoting JU068 (Reply 35):
There is a reason why no one is rushing to established direct links between Cyprus and Dublin.

I'm just guessing that a direct flight will make it more preferable maybe? Its a different thing having a small amount of charter flights and a regular scheduled flight. Just my guess  
 
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OA260
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RE: Cyprus Airways: Investor Or Close Down

Sat Apr 06, 2013 6:53 pm

Quoting VCy (Reply 34):
A good thing is that CY's pilots are trained on A320s and A321s as well so that will make it easier i guess. But yes, its fair to say that even at such a scenario the majority of its current employees will be unemployed.

Yes it was similar with OA. Some pilots went from A3 to OA and now some have gone back and to other A320/321 operators.
 
LAXintl
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RE: Cyprus Airways: Investor Or Close Down

Sat Apr 06, 2013 8:50 pm

Quoting VCy (Reply 30):
according to the article (in greek), the government is trying to connect the island with flights to China and also try and make the island a transit hub "Dubai style", but obviously to a smaller scale.

LOL. That ship sailed long time ago.

Trying to make LCA into a regional hub not only will take lots of time, its will take massive investment in building a decent sized airline and network to make it worthwhile

But one could say in reality CY has already tried to do this for the last couple decades, by connecting places in Europe with the Levent region, Egypt and Gulf also.

However we know what CY did was quickly eclipse by much more more formidable competitors. Ignoring the ME3, and likes of TK, CY also has to compete with folks like ME, RJ, MS, AZ which are also busy trying to get a share of the transit game. Even the old OA tried hard to be such a carrier but by the 1990s even ATH was not much of a transit hub.

In my mind this is simply a silly dream that will cause even more massive red-ink for a Cypriot airline.
From the desert to the sea, to all of Southern California
 
VCy
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RE: Cyprus Airways: Investor Or Close Down

Sat Apr 06, 2013 9:47 pm

Quoting LAXintl (Reply 38):
LOL. That ship sailed long time ago.

Trying to make LCA into a regional hub not only will take lots of time, its will take massive investment in building a decent sized airline and network to make it worthwhile
Quoting LAXintl (Reply 38):
In my mind this is simply a silly dream that will cause even more massive red-ink for a Cypriot airline.

Well, yes obviously it will take alot of time. I dont think anyone thinks LCA will be a massive hub by next year   and by saying hub they dont mean huge stuff, but a much smaller one , which will be big enough for a small country like Cyprus.
That ship hasn't really sailed a long time ago, as with the correct product and pricing they will manage to achieve their mini hub idea.
The investment can take place through foreign interest. As already mentioned, the airline is close to being sold to a Chinese company that has alot of experience with airlines. Even if they fail to sell it, they will undergo a serious restructuring plan if they decide to keep the airline alive.
The recent developments in the economy have shaken up everyone on the island, therefore they will seek to do anything possible to become more efficient in any industry possible.
I wouldnt go as far as calling it a silly dream, but rather a logical & ambitious plan to take advantage of their geographical location, but you are entitled to your personal opinion    
 
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OA260
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RE: Cyprus Airways: Investor Or Close Down

Sat Apr 06, 2013 10:42 pm

Quoting VCy (Reply 39):
I wouldnt go as far as calling it a silly dream, but rather a logical & ambitious plan to take advantage of their geographical location, but you are entitled to your personal opinion    

It certainly would be ambitious and of course if there was a chance I wish them luck with it. They picked themselves up after 1974 and prospered against all odds so lets hope the same resolve exists in both aviation and the country in general. When you think of what CY used to be and was the envy of management at OA in the state controlled days its amazing how it all turned out.
 
mercure1
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RE: Cyprus Airways: Investor Or Close Down

Sat Apr 06, 2013 11:14 pm

CY building a "mini" hub is hardly a positive business plan to follow and certainly not some that that can be done well on a small fleet.

For a successful hub you needs lots of spokes, which means lots of flights, which means lots of planes.
Having a small fleet will not provide much opportunity.
Yes look at ME, or RJ or even the former OA, or even todays AZ and the difficulty they have in running a hub operation being a small player. Being small will force CY to discount heavily to attract any flow on the few connections they can offer, hardly quality revenue.

To me Cyrus has 1 option -- a very low cost, very efficient, high utilization LCC basically. The market by its nature is primarily a tourist one or ethnic diaspora which by their nature mean people looking for cheap tickets, so the airline needs to be built with expectation of earning low revenues to have a chance.
 
JU068
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RE: Cyprus Airways: Investor Or Close Down

Sun Apr 07, 2013 7:05 am

Turning Larnaca into a regional mini-hub could work but it would take a lot of time and planning. There are many things that would work in their favour.
First of all, there are a lot of Lebanese and Israelis residing in Cyprus and they are extremely rich. The market is massive, mostly O&D, which is explained by MEA sending their A330-200 regularly into Larnaca, even if it is only a 20 minute flight. Back in the day, El Al used to send their B777s into Larnaca while Cyprus Airways sends very often their A321s into Tel Aviv.
There is a considerable market to Tehran (with around 3,000 Iranians living here) and Cyprus is a popular tourist destination for the Iranians. Last year the number of Iranian tourists grew so much that Mahan introduced scheduled flights from Tehran on their A310 (one could fly for as little as €170!). Other cities in the region can sustain direct flights by only relying on the O&D passengers (Cairo, Amman...).
One thing Cyprus Airways can do is that they can use the island's tourist potential and enter new markets where flights will be initially sustained through the sale of seats to tourist agencies. They had two great opportunities they missed last year, that was Brussels and Erbil. Erbil was a scheduled flight, which was quite successful, while Brussels was subsidized by the European Union due to the presidency. A friend of mine who works for the Tourist Organization of Cyprus in Paris told me that they have been pushing for Cyprus Airways to launch flights to Lyon and Marseille as there is great interest but for some reason they never did it.

I would also like to point out that before the massive increase of Middle Eastern carriers in Cyprus (sometime after 2006) Emirates operated around ten flights per week. Daily flights were on a B777-300 while the evening flights were on a mix of A340s and A330-200s. After that, many airlines such as Gulf Air, Etihad, Egypt Air, Royal Jordanian... either introduced their own flights to Larnaca or revised their schedules so as to allow connections via their own hubs. This hurt Emirates' loads and they were forced to stick with the one daily flight, currently operated by B777-200.

The main problem Cyprus Airways has is its cost structure, which does not allow it to operate efficiently. Furthermore, its unions have too much say. For example, my neighbour who was a pilot for Cyprus Airways told me that until recently most Cyprus Airways flights used to depart around 09:00 (and a lot still do) because the pilots and cabin crew could not be bothered to leave their homes earlier to fly.

Creating an ultra lowcost carrier would not work because Cyprus is too small and nothing would be achieved in the long run. They need to find a way to reduce the negative effects of their market's seasonality, and by expanding their regional network they can exactly do that.
 
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OA260
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RE: Cyprus Airways: Investor Or Close Down

Sun Apr 07, 2013 10:00 am

Quoting mercure1 (Reply 41):
For a successful hub you needs lots of spokes, which means lots of flights, which means lots of planes.
Having a small fleet will not provide much opportunity.

For sure they would need feed into a mini hub so unless they can team up with someone else it would be very hard. The diaspora on Cyprus would not support a certain route on its own wherever they hail from. Even the Greeks/Cypriots in MEL couldnt support diaspora flights and thats a huge amount of around 380,000 of Greek heritage/birth.

Cyprus may indeed need a LCC model and could also consider wet leasing their aircraft during the Winter when traffic is lower. The problem with teaming up with Tour Operators is that unless they are willing to take half of the losses ( should there be any ) by taking a guaranteed amount of allocation then its not that benefical.
 
Tobias2702
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RE: Cyprus Airways: Investor Or Close Down

Sun Apr 07, 2013 12:03 pm

So, when do you expect the official announcement about the future of CY? Today (Sunday), tomorrow (Monday) or some time later?

Being honest, I don't think that there is any chance for CY to survive. Therefore, I can only hope that the end comes quick (that is, immediate shut-down). Please no live-sustaining measures by allowing the airline to remain operational throughout the summer season: That would just be a useless waste of money.

Concerning this (alledged) Chinese investor: Is there any reference that this company, Beijing Yi Xiang Da Investment, exists at all? Could it just be an empty box, just a name to calm down the public? Obviously, no airline wanted to invest in CY, so why would those Chinese guys succeed?

The reason why CY won't have any prospering future? Cyprus is generally a low-yielding market, which in today's market environment is the natural territory of LCC's. There are Ryanair, easyJet and Wizzair, plus a large number of small charter airlines serving the island. There just insn't any space left for an airline with less than 10 aircraft.

And to all of those who think that CY should try and put up a "mini hub". Guys, what is this supposed to be? To my knowledge, there is not a single self-sustained airline operating a small number of aircraft on scheduled flights out of an airport with a significant amount of competition. Nowhere.

The concept of "one flag carrier per country" is dead. Cyprus with its 1 million inhabitants and near-bankruptcy should adress more pressing problems than the fate of a doomed company. Of course, sorry for those directly affected, but it's a question of the greater good.
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RE: Cyprus Airways: Investor Or Close Down

Sun Apr 07, 2013 12:38 pm

Quoting Tobias2702 (Reply 44):
So, when do you expect the official announcement about the future of CY? Today (Sunday), tomorrow (Monday) or some time later?

Monday there is another meeting so more will come from that no doubt. The other thing is anyone taking over CY would also have to deal with a EU investigation into state aid so it might be better to just sell the name and logo and shut down to avoid any implications from future rulings. Then a private company could launch without the debt burdens.
 
Cassi
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RE: Cyprus Airways: Investor Or Close Down

Sun Apr 07, 2013 1:59 pm

Quoting Tobias2702 (Reply 44):
Concerning this (alledged) Chinese investor:

The appearance of mysterious, unheard of last-minute Chinese (or Russian, or Chinese-Russian) investors is usually the last stage before bankruptcy.
 
panais
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RE: Cyprus Airways: Investor Or Close Down

Sun Apr 07, 2013 6:46 pm

Quoting Tobias2702 (Reply 44):
Therefore, I can only hope that the end comes quick (that is, immediate shut-down). Please no live-sustaining measures by allowing the airline to remain operational throughout the summer season: That would just be a useless waste of money.

This seems to be the only prescription offered by Germans to Cyprus lately.(Sorry, just couldn't resist, just look at the banking fiasco)

Quoting Tobias2702 (Reply 44):
Beijing Yi Xiang Da Investment, exists at all?

This company does not exist in Cyprus, it is not registered. I bet this looks like one of those specials, where someone signs a contract and then turns around to sell it to real companies, who do not want to show that they are interested.

Quoting Tobias2702 (Reply 44):
Obviously, no airline wanted to invest in CY, so why would those Chinese guys succeed?

You should look at the map from a Chinese perspective. Chinese increasingly want to travel abroad and Israel, Egypt, Greece are staff that they are taught in their history class, I presume. Additionally, Cyprus Airways having national carrier status has slots for all African countries, where China is investing a lot of money.

Quoting Tobias2702 (Reply 44):
Cyprus is generally a low-yielding market, which in today's market environment is the natural territory of LCC's

Again that depends on which way you look at it. Although non Cypriots are as Michael O'Leary said "...air passengers are hardy beasts—parsimonious when buying a ticket, profligate once in the air—willing to endure discomfort and indignity...", this does not work for Cypriots. If there is value in an airline, we will sepnd some extra Euro.

Quoting Tobias2702 (Reply 44):
And to all of those who think that CY should try and put up a "mini hub". Guys, what is this supposed to be? To my knowledge, there is not a single self-sustained airline operating a small number of aircraft on scheduled flights out of an airport with a significant amount of competition. Nowhere.

Agree, CY as is today does not have any experience in running a minihub or has the financial cloud to fund such plan. They tried so many times and failed each one.

Quoting Tobias2702 (Reply 44):
The concept of "one flag carrier per country" is dead.

Dead in Europe, not in the middle east or Africa or CIS where Cyprus is right in the middle, EU most Southeastern place.

Quoting Tobias2702 (Reply 44):
Cyprus with its 1 million inhabitants and near-bankruptcy should adress more pressing problems than the fate of a doomed company.

This is similar to what the American did with Berlin when the Soviets blocked all access in 1948. Why should the Americans cared about Berlin, after-all it was a burned up place. When you live on an island you feel like a 1948 Berliner.

Quoting Tobias2702 (Reply 44):
Of course, sorry for those directly affected, but it's a question of the greater good.

I feel that this is a political statement and as a Cypriot, I am offended by this. Define greater good to the 45 year old special needs person who her 75 year old parents placed their money with Laiki bank that would have taken care of her after they are gone. Or define greater good to thousands who are getting fired just because their employer had their accounts with Bank of Cyprus or Laiki.
 
VCy
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RE: Cyprus Airways: Investor Or Close Down

Sun Apr 07, 2013 6:58 pm

Quoting panais (Reply 47):
This seems to be the only prescription offered by Germans to Cyprus lately.(Sorry, just couldn't resist, just look at the banking fiasco)
Quoting panais (Reply 47):
I feel that this is a political statement and as a Cypriot, I am offended by this

My thoughts exactly but tried not to turn it into a political discussion. Glad you pointed this out tho  
 
mercure1
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RE: Cyprus Airways: Investor Or Close Down

Sun Apr 07, 2013 7:18 pm

The more I think about it, the more I realize place like Cyprus does not need an own airline.

Being in EU it already has openskies, and it can adopt instead an incentive policy to incourage increased air service from select routes or markets. Much cheaper then running a costly enterprise.

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