NICOSIA (Reuters) – Cyprus’s loss-making national carrier Cyprus Airways will shed more than a quarter of its work force this year to save the airline from closure, senior officials said on Thursday. Earlier, labor unions at the state-controlled carrier said they accepted a restructuring proposal calling for some 500 voluntary redundancies among a work force of 1,800 and salary cuts across the board. «We will start the restructure plan immediately,» said Cyprus Airways Chairman Lazaros Savvides. The redundancies are expected to take effect in March. Worries have mounted over the financial viability of the group and what its fate could spell for tourism, a sector which underpins the economy of Cyprus. The state, which owns 70 percent of the Cyprus Airways Group, says it plans to spin off charter subsidiary Eurocypria to create a second, debt-free carrier. Buying out Eurocypria was initially seen as only a fallback option to safeguard Cyprus’s air slots to major airports. But in the course of deliberations to save the group it emerged as a viable alternative, second carrier for Cyprus. «We have decided to start the consultations on the sale of Eurocypria as soon as possible,» said Savvides. The restructure is designed to save the Cyprus Airways group up to 21.8 million Cypriot pounds ($45.92 million) a year. External consultants say the airline faces a loss of up to 28 million pounds for 2005 and could go under if savings and additional funding is not found fast. The overhaul was required for Cyprus to get approval from the European Union to act as a guarantor for a 58-million-pound emergency loan the airline seeks. Company officials said that some 355 individuals had sought early redundancy from the 500 required for the plan to work. The overhaul suggests that some 385 should go from core activities of the airline, with most of the rest coming from activities like catering, which will be partly outsourced.