Cyprus Airways viability dependent on approval of turnaround plan

Cyprus Airways stated (04-Mar-2013) the ability of the company to continue to operate as a going concern for the next twelve months is directly associated with the decision of the Council of Ministers in its meeting on 04-Dec-2012 to approve the Turnaround Plan. The plan was prepared by Air France Consulting, submitted to the Finance and Budgeting Committee of the House of Representatives and was approved by the Council of Ministers. It still requires European Commission approval. The main pillars of the said Plan are the following:

• Provision of funding to the company in order to be in a position to implement the plan;
• Reduction in the number of employees of the Company and increase in their productivity;
• Outsourcing of specific departments;
• Reductions in the employees' emoluments and removal from the collective agreements of distortions in its mode of operation;
• Expansion in the larger and less seasonal Greek market;
• Introduction of measures to improve the product and the image and increase the Company's revenues.

The implementation of the measures of the Turnaround Plan is expected to lead to a drastic reduction in the operating losses for the current year in comparison to 2012 and it will have a favourable impact on the long term viability of the company. The company also said: "It should also be noted that the efforts for identifying a strategic investor will continue while the Government has already proceeded with a Rescue Aid application for the Company to the European Union". [more - original PR]