FINANCE Minister Charilaos Stavrakis yesterday invited the boards of state airlines Cyprus Airways (CY) and Eurocypria to a meeting on Friday aimed at bridging their differences and encouraging co-operation, saying he wanted both airlines to be healthy and prosperous.

Stavrakis called the meeting after CY Chairman Kikis Lazarides had sent him a letter last week calling on the government to either shut down 100 per cent state-owned airline Eurocypria or allow it to be taken over by CY. In his letter, Lazarides argued that the island simply isn’t big enough for two national carriers, and suggested that continued competition between the airlines would ultimately lead to the ruin of both of them. 

Lazarides’ letter led to a public argument with Eurocypria Chairman Lefteris Ioannou, which Stavrakis is keen to resolve. The Minister said yesterday: “It is sad to see two state companies (…) at loggerheads with each other in public” adding that “our wish is for both to be healthy and to prosper”.

Asked by reporters about the possibility of Eurocypria’s operations being suspended, Stavrakis said that “in the theoretical case of Eurocypria closing down, that would have catastrophic consequences for tourism in Cyprus.” He added that the carrier brings around 300,000 thousand tourists to the island every year, equivalent to around 15 per cent of the total number.

Describing the matter as being “very complicated”, the Minister said that Eurocypria’s closure might result in a large part of that tourist flow going elsewhere, quite apart from the question of the staff’s future and leasing agreement payments on aircraft that would have to be made whether the airline was operating or not.

He added that specific proposals, which may include increasing Eurocypria’s share capital subject to a formal request from the airline, will have to come from both boards. Meanwhile, he confirmed previous indications that the Finance Ministry’s experts think that there is some margin for co-operation between the two companies which could result in a reduction of operating costs. 

Given that the state owns 70 per cent of Cyprus Airways and 100 per cent of Eurocypria, Stavrakis is in a position to do more than offer polite advice. 

“We are waiting for a complete proposal, and if we are satisfied regarding [Eurocypria’s] viability, then we will surely proceed with taking suitable measures”, he said.

DISY Vice President Averoff Neophytou offered his own comment yesterday, saying that the government had let the situation drag on for a year and a half, and we had now reached the limit where Eurocypria alone would need a cash injection of €35 million to plug the gaps in its finances. He added that both airlines were facing a “bleak future”.