ECONOMY

Cyprus Air plans Greek subsidiary

NICOSIA – Flag carrier Cyprus Airways plans to create a Greek subsidiary by the end of the year and start flying by early 2003, a spokesman said yesterday. The Cypriots’ foray into the Greek market comes as the future of national carrier Olympic is in doubt after its privatization process ended in disarray last week. Frustrated at incessant delays in the privatization process, Cyprus Airways withdrew its bid for Olympic last year about three months after putting its name forward. It is no longer interested in the Greek airline, said Cyprus Airways spokesman Tassos Angelis. «We have opted to expand in Greece differently, and that is to create our own company,» he told Reuters. The Cypriot carrier, which is majority state- owned, planned to create and register a subsidiary in Greece by the end of this year. «Our target is to start flying by the spring of 2003 with flights between Greece and the rest of Europe,» he said. Cyprus Airways is now conducting a feasibility survey on what sort of carrier would better suit the Greek market. It is also looking at a budget, low-cost option, Angelis said. «We are convinced there is room for another airline in Greece, particularly in view of the situation with Olympic,» he said. Cyprus Airways’ bid for Olympic was ranked second last year by Greek government privatization advisers Credit Suisse First Boston. However, it yanked its offer before its turn came in a round of negotiations which started with preferred bidder Axon. Cyprus Airways managers were frustrated at signs of long delays in the sell-off of Olympic. Speculation was also rife they got cold feet after gaining access to the Greek carrier’s accounts, showing debts well in excess of $100 million, and reviewing its business practices. Greek government discussions with Axon collapsed last October, and a month later the private carrier suspended operations citing a turndown triggered by the September 11 attacks on the United States. Negotiations with the third bidder on the list, Integrated Airline Solutions, were suspended on Friday after it failed to meet a deadline for the provision of financial guarantees.