ECONOMY

Cyprus denies it intends to sell state airline

NICOSIA (AP) – The Cypriot government denied yesterday it intended to sell Cyprus Airways, after submitting a revised rescue plan for the ailing national carrier to the European Commission. EU approval of the plan would clear the way for Cyprus Airways to qualify for a 58-million-Cypriot pound (100-million-euro) bank loan to cover the airline’s midterm survival and cost of restructuring. The carrier had a 20.4-million-Cypriot pound (35.6-million-euro) net loss in the first six months of 2005. «There is no government decision to sell the company,» Transport Minister Haris Thrasou told The Associated Press. The government’s stake in the company is just under 70 percent. Airline chairman Lazaros Savvides said the revised version of the reconstruction plan provided for 30 additional layoffs and wage cuts of up to 25 percent that will mainly affect the company’s higher earners. The original plan was submitted to the government by the company’s board last month. It proposed to ax 343 of the airline’s 1,832 jobs, cut wages by 8 percent, outsource services, and change operational practices in a bid to save 20 million pounds (34.9 million euros) per year. The government on Wednesday decided that the board’s plan fell short of EU expectations and adopted additional last-minute cutbacks, warning the company could close by the end of November if the plan was rejected by the EU. The head of the airline’s biggest union, Cynika, said the revised plan was a government ploy to shut down the company. «They are asking for the impossible so that we say no, and they say they have no choice but to shut it down,» Costas Demetriou said.