ECONOMY

Cyprus Airways keen to be rid of State’s suffocating embrace

NICOSIA (Reuters) – Cyprus Airways urged its state bosses to ditch their share in the carrier yesterday, saying it hampered competition with more flexible private peers. The government owns 68 percent of the airline and must cut it to at least 51 percent before deregulation kicks in, said Chairman Haris Loizides. «It is inconceivable to expect Cyprus Airways to compete on a level playing field with private carriers with 68 percent of the airline in state hands,» said Loizides. Appeals to the government to delay deregulation of air routes, dictated by anticipated entry into the European Union by 2004, have fallen on deaf ears. Market liberalization is expected on January 1, 2003. Move into Greek market In a bid to offset deregulation at home, Cyprus Airways is moving into the Greek market with the creation of subsidiary Hellas Jet, expected to fly by April 2003. The airline has long implied that the government exerts heavy-handed control over the carrier, ranging from restrictions on employing foreign staff, which do not apply to private carriers, to being expected to continue loss-making routes which others abandon. Cyprus Airways has barely concealed its annoyance at a perceived haste by the government in giving licenses to private operators. «Private airlines must be happy. The deregulation date was moved forward to 2003 from 2004 and already authorities are issuing a raft of permits to destinations we can’t fly to,» Loizides said before an annual general meeting of the company later yesterday. Shrinking profits The company posted pretax profits of 4.05 million pounds ($6.9 million) in 2001 over 5.6 million in 2000. Last year’s gains were lifted primarily by revenue from the airline’s duty-free shops. The outlook for 2002 was unclear because of a decline in tourism arrivals, Loizides said. According to official figures, Cyprus had a tourism intake of 2.9 million visitors in 2001, showing flat growth. Estimates on how much the tourism industry has been hit by the September 11 attacks on the USA and growing violence in the Middle East vary from a decline of around 8 percent, which is what authorities say, to a 20-percent nosedive cited by hoteliers.