ECONOMY

Cyprus Air dismisses 123 staff

NICOSIA (Reuters) – Cyprus Airways axed 123 jobs across the board on Friday as part of a controversial rescue package to save the ailing airline. The move will save the national carrier 2.8 million pounds ($6.4 million) a year, the airline said in an official notice to the Cyprus Stock Exchange. «Cyprus Airways would like to inform investors that within the framework of the adoption of the provisions of the action plan for the company’s reorganization, it will proceed to the dismissal of 123 redundant employees,» the notice said. A company spokesman said redundant staff would receive their wages and benefits by the end of next week and would also receive redundancy payments sometime next month, once the airline secures approval for a government loan guarantee. The 123 employees have not worked since Nov. 1 when the airline withdrew two of its Airbus A320s from service as part of the airline’s restructuring plan. The company has been paying their wages since then because it did not have the funds for their redundancy compensation. Cyprus Airways hopes its rescue package, which also includes cost-cutting, restructuring of routes and cuts in staff perks, will help return the airline to the black in 2006. Only pilots and cabin crew, comprising around one-third of the staff, have rejected the package but have refrained from industrial action. Since it began implementing the strategic plan late last year, the company has reduced staff levels from around 2,000 to 1,700. Cyprus Airways announced losses of 30 million pounds for the first half of 2004. Annual results are due out before the end of the month.

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