Good afternoon!
It seems that another airline is undertaking necessary measures in order to avoid bankruptcy!
Here are some of the main parts of the article:
- 407 people will lose their job, which will bring the total number of employees to 623.
- The Cypriot parliament is expected to increase the capital by €31 million (after it gets approved)
- The plan must also make the airline attractive to any strategic investor wishing to acquire a majority stake in CY.
- Drafted by Air France-KLM, the plan is expected to bear fruit at the end of 2013 although it would take an additional investment of €60 million.
- The CY chairman said discussions with the unions will start immediately after parliament gives its views.
- The national carrier posted a €32.1 million loss in the first half of the year as passenger and cargo revenues dwindled.
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Cyprus Airways had already taken some measures to reduce costs, most notably they retired the two A330-200s. They replaced these with A321s.
I doubt the Cypriot government would let CY go bankrupt that easily. After all Cyprus is an island and CY is the only serious airline operating out of LCA.
A3's network is very limited and after the recent argument between the CTO and Ryanair, I doubt many are relying on them in case CY goes belly up.
Cyprus Airways currently flies to 24 destinations, they have entered the Greek market with numerous new routes and they have 11 aircraft in their fleet.
2 A319s
7 A320s
2 A321s
Full article here:
http://www.cyprus-mail.com/cyprus/cy...optimistic-about-new-plan/20121110
[Edited 2012-11-12 03:15:02]
Moderators: jsumali2, richierich, ua900, PanAm_DC10, hOMSaR
RE: Cyprus Airways Bosses Optimistic About New Plan
Very interesting report. I have flown them many times on their services to Cyprus and onwards to Lebanon.
They always offered a very good service and well priced too, in both cabins. One of the last flights I had with them was Beirut - Larnaca (A320) and then Larnaca - Pafos (A330) and Pafos - Heathrow (A330). Lovely service.
I read earlier in the year that Middle East Airlines was looking at purchasing the airline or investing in it?
Have those plans fallen through or do you think that they wanted CY to restructure before they would make any serious move on them?
They always offered a very good service and well priced too, in both cabins. One of the last flights I had with them was Beirut - Larnaca (A320) and then Larnaca - Pafos (A330) and Pafos - Heathrow (A330). Lovely service.
I read earlier in the year that Middle East Airlines was looking at purchasing the airline or investing in it?
Have those plans fallen through or do you think that they wanted CY to restructure before they would make any serious move on them?
- Alec
RE: Cyprus Airways Bosses Optimistic About New Plan
I sure hope they do something about their check-in staff at LCA though. They can easily qualify for "Rudest check-in staff of the year award". Haven't seen anything as bad since NWA was the only show in DTW.
If it weren't for UAW, Detroit would shine!
RE: Cyprus Airways Bosses Optimistic About New Plan
| Quoting raffik (Reply 1): I read earlier in the year that Middle East Airlines was looking at purchasing the airline or investing in it? |
To be honest I do not know what MEA would gain from taking over Cyprus Airways. Maybe some sort of partnership would be better.
A friend of mine who lives in Paris used to fly to Larnaca very often and he told me that at least half of the plane would continue onwards to Beirut.
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- pilotanthony
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RE: Cyprus Airways Bosses Optimistic About New Plan
that's Greeks for you I guess!
Anthony Paraschou
RE: Cyprus Airways Bosses Optimistic About New Plan
| Quoting JU068 (Reply 3): that at least half of the plane would continue onwards to Beirut |
I would say this is very likely. I know that during the summer period MEA utilise their A330s on the very short hop to Larnaca- I think the flight time is about 35 minutes. It is literally up and then down again.
I'm not sure what MEA would get from buying the airline- most probably as an investment.
- Alec
RE: Cyprus Airways Bosses Optimistic About New Plan
| Quoting raffik (Reply 6): |
I was once on that route and it took us 17 minutes from take off to landing! However the route mostly serves O&D demand. I remember back in the day when CY had widebodies, you would see two A330s depart to Lebanon. Mind you, both airlines are making crazy cash on the route as a return fare is usually around €200!
More news from Cyprus Airways:
- There are fears that the union might reject this deal because initially they had agreed to fire 250 people, current number stands at 407.
- it sets out to abolish all the costly perks and privileges of staff in the collective agreements, which unions secured in the good old days. It envisages drastic pay cuts for all staff, to bring wages in line with is paid by the competition, the scrapping of anachronistic and rigid provisions from the collective agreements and the introduction of new working hours that would cater for the operational needs of the airline.
- Pilot salaries will be cut between 40% and 50%.
- the total compensation cost for making 250 employees redundant was €17 million, for 407 workers it would be in excess of €25 million.
RE: Cyprus Airways Bosses Optimistic About New Plan
Will this latest "restructuring" be approved by the EU?
I thought the 2010-2011 bailout by the Cypriot government when Eurocypria was closed down was CY's last opportunity to get government aid.
Unfortunately like the airline events in Greece, the saga of CY is a long and complex with many parties from the government to social unions making things far from easy to run a commercial transportation enterprise.
I thought the 2010-2011 bailout by the Cypriot government when Eurocypria was closed down was CY's last opportunity to get government aid.
Unfortunately like the airline events in Greece, the saga of CY is a long and complex with many parties from the government to social unions making things far from easy to run a commercial transportation enterprise.
From the desert to the sea, to all of Southern California
RE: Cyprus Airways Bosses Optimistic About New Plan
I just realized as someone reminded me, this would be CY's 3rd bailout from the government since joining the EU in 2004.
Back in May 2005 the EU commission approved a €51mil rescue loan while the Cypriot government worked on a broader restructuring plan for CY. That plan was approved in November 2005 with a total value of €96mil of government loan guarantees and €24mil in direct capital increase to CY.
So I am amazed CY can even consider asking the Cypriot public for more money. I'd figure some competitor would rightfully complain.
Back in May 2005 the EU commission approved a €51mil rescue loan while the Cypriot government worked on a broader restructuring plan for CY. That plan was approved in November 2005 with a total value of €96mil of government loan guarantees and €24mil in direct capital increase to CY.
So I am amazed CY can even consider asking the Cypriot public for more money. I'd figure some competitor would rightfully complain.
From the desert to the sea, to all of Southern California
RE: Cyprus Airways Bosses Optimistic About New Plan
| Quoting LAXintl (Reply 9): |
Are you sure it is only their third bail-out? From what I can remember they have not been profitable in over 20 years.
Cyprus Airways is entitled to some special monetary assistance by the government as it is unable to overfly Turkey, as it is less competitive because of that. So the government has been using this mean to give it more money than the airline actually needed. The European Union used to turn a blind eye because Cyprus is an island and they absolutely need decent and reliable links with Europe.
Even the whole situation with Ryanair is uncertain and the government did have a bad experience.
I believe that this time they are left with no choice but to find a long-term solution to this issue. The government is on the brink of bankruptcy (currently they have enough money to survive until December) and they can't keep the airline in the current state. Up until recently, it was unimaginable for a government owned company to fire 400 people. That is why I am confident they are doing the right thing now.
RE: Cyprus Airways Bosses Optimistic About New Plan
| Quoting JU068 (Reply 10): Are you sure it is only their third bail-out? From what I can remember they have not been profitable in over 20 years. |
Well third one since joining EU in 2004.
The overflight compensation has been going on for a while also and seems to be a regular thing that no one minds. For instance for 2011 they received €5.3mil in aid. All in all over €20mil has been given to the airline the last few years as "compensation" for having to fly around Turkey.
From the desert to the sea, to all of Southern California
RE: Cyprus Airways Bosses Optimistic About New Plan
| Quoting LAXintl (Reply 11): |
hahaha yeah I just thought it was every year that they got compensation from the government!
I know for a fact that the aid they got in 2010 was illegal but the European Union did not say anything. Maybe because that same year the government decided to shut down Eurocypria.
The airline did introduce some cost-cutting measures but the fact that it had way too many employees was hurting them more than anything. I am glad they are doing something about it. Cyprus Airways is a good airline in my opinion and I would hate to see it go belly up.
RE: Cyprus Airways Bosses Optimistic About New Plan
I think this time will be different from the past because the Parliament has the upper hand.
1. The Parliament asked for a new Board in order to consider the share capital increase: The Board was replaced two months ago.
2. The Parliament voted that a new detailed restructuring plan was required to be drafted and submitted to them for approval. They got it last week.
3. The next step is for the plan to be approved by the Parliament and the CY Board and then put into action.
The MPs warned the Unions that if this plan is not pursued, then they will not be voting in favor of the share capital increase and, in this case, CY could close.
...and one very important detail: The current Government doesn't have a majority in the Parliament...
[Edited 2012-11-16 15:09:19]
1. The Parliament asked for a new Board in order to consider the share capital increase: The Board was replaced two months ago.
2. The Parliament voted that a new detailed restructuring plan was required to be drafted and submitted to them for approval. They got it last week.
3. The next step is for the plan to be approved by the Parliament and the CY Board and then put into action.
The MPs warned the Unions that if this plan is not pursued, then they will not be voting in favor of the share capital increase and, in this case, CY could close.
...and one very important detail: The current Government doesn't have a majority in the Parliament...
[Edited 2012-11-16 15:09:19]
RE: Cyprus Airways Bosses Optimistic About New Plan
Here is another interesting article which gives hope that something will be done with Cyprus Airways.
http://www.cyprus-mail.com/cyprus/un...ns-unhappy-cy-rescue-plan/20121116
One part that shocked me was that they were planning to outsource the maintenance of their aircraft. How can that be cheaper for the airline?
One good sign is that the unions are quiet, as CYatUK mentioned, because they were warned that this is the last chance to do something constructive with the carrier.
http://www.cyprus-mail.com/cyprus/un...ns-unhappy-cy-rescue-plan/20121116
One part that shocked me was that they were planning to outsource the maintenance of their aircraft. How can that be cheaper for the airline?
One good sign is that the unions are quiet, as CYatUK mentioned, because they were warned that this is the last chance to do something constructive with the carrier.
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- [email protected]
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RE: Cyprus Airways Bosses Optimistic About New Plan
| Quoting JU068 (Reply 14): One part that shocked me was that they were planning to outsource the maintenance of their aircraft. How can that be cheaper for the airline? |
Don't have assets/resources that are sub-optimally used - which would surely be the case for a small airline like CY - and can shop around for the best deal for your specific requirements. Outsourcing maintainence is hugely popular, with many airlines, including most LCCs, doing it.
"Everyone writing for the Telegraph knows that the way to grab eyeballs is with Ryanair and/or sex."
RE: Cyprus Airways Bosses Optimistic About New Plan
| Quoting [email protected] (Reply 15): |
Thanks for the info. So how would they do it? Would they find an airport to which they operate and have them serviced there between two flights or ...?
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- [email protected]
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RE: Cyprus Airways Bosses Optimistic About New Plan
| Quoting JU068 (Reply 16): Thanks for the info. So how would they do it? Would they find an airport to which they operate and have them serviced there between two flights or ...? |
I was referring more to heavy maintainence. I'm not sure how it works for more routing checks. Perhaps they do that in-house?! Not my kind of area.
"Everyone writing for the Telegraph knows that the way to grab eyeballs is with Ryanair and/or sex."
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- IndianicWorld
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RE: Cyprus Airways Bosses Optimistic About New Plan
It sounds as though another union wants to think of itself as the saviour of a few workers again, yet will ultimately likely just bring down the lot of them. Mind you, those union leaders will probably still have their jobs, which won't be the first time that has happened.
Tough cuts yes but if they have any chance of surviving drastic actions are required. This industry is undergoing huge change and a few trying to hold onto the past is fast track to a messy end.
Tough cuts yes but if they have any chance of surviving drastic actions are required. This industry is undergoing huge change and a few trying to hold onto the past is fast track to a messy end.
RE: Cyprus Airways Bosses Optimistic About New Plan
| Quoting DBCooper (Reply 18): |
Well Eurocypria was not doing that well either. The government should have never established the airline as it was pointless. In 2010 Eurocypria asked for €35 million is aid from the government to cover its losses.
Interestingly enough, Cyprus Airways unions opposed the transfer of Eurocypria staff into their company stating that they already had a problem of over-employment. Naturally, the government did not listen and they did as they pleased.
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