Cash-poor Cyprus Airways’ employees were still waiting for their monthly salaries yesterday despite public assurances by the national carrier’s boss that the money is there.
And that the problem is a dispute between the management and pilots who strongly object to provident fund contribution by the employer to be cut from 8% to 1%.
“The money is there, all staff will get their salaries before the day’s end,” Tony Antoniou told state radio.
“We could not apply this necessary measure which is only temporary anyway to some and not to others. All staff has to undergo the same painful cuts,” he added.
However, insiders said that the some 70 pilots are adamant over this and that the four other unions said yes to the cut if and only if Pasipy (pilots union) followed suit.
Pilots are also sceptical over Antoniou’s assurances saying that the management has not bothered to even send an internal circular explaining why salaries are delayed.
“It’s all rumours and speculation. First they said the delay was due to a technical problem, then they came up with the truth over the pilots’ dispute and all this at a time when the future of the carrier is up in the air,” one source said.
On Tuesday, the European Commission announced that regulators had opened an in-depth probe into the restructuring plans of the island’s struggling national carrier. The restructuring plan runs from 2012 to 2017.
The Commission said it would look into whether an aid package of €102.9 million was in line with EU state aid rules and whether the plan would allow the airline to survive without continued state support.
“The commission has doubts whether the restructuring plan is suitable to ensure Cyprus Airways’ long-term viability and whether the airline is capable of withstanding likely challenges in the air transport market during the next years,” the Commission said.
“It is also uncertain whether the proposed capacity reduction through the cancellation of routes is sufficient to compensate for the distortions of competition created by the state support,” it added.
The Commission also said that the carrier had already benefited from other state aid measures since 2007, despite EU rules saying that restructuring aid can be granted only once over a 10-year period.
The opening of an investigation doesn’t prejudge its outcome but Antoniou said yesterday that a Plan B has been discussed in detail with a ministerial committee set up to deal with CA’s future.
Plan B is to be implemented if the Commission turns down the restructuring plan forcing the debt-ridden carrier to close down immediately.