“We want to initiate the procedure to create a new company in cooperation with the private sector,” communications and works minister Marios Demetriades said in a telephone interview today. “We already have acquired the company logo and brand name and we instructed the commissioner for privatisations to appoint an advisor in order to have an open and transparent procedure

Demetriades said that the appointment of an advisor by commissioner for privatisations Constantinos Herodotou may take about a month. He added that the government wants to have a new airline operating as early as possible. “The longer you delay, the smaller your chances get to be successful,” he said without specifying when the new airline will be operational.

The minister said that efforts are underway to explore investor interest, which so far was entirely restricted to Cyprus Airway’s assets.

The European Commission ruled yesterday that Cyprus Airways had to return over €100 million in state aid it received in recent years, as the grants in the form of capital increase was illegal. The company, which was owned to 94% by the state and suffered heavy losses in the previous decade, as it was unable to cope with increased competition from foreign airlines following Cyprus’s European Union accession in 2004, lacks the money to do so. It sold all its major assets in recent years, including most of its fleet and slots in major airports abroad in order to generate cash.

As a result, the government’s chances to recover any money it siphoned into the company in recent years from the pending liquidation of the failed airline’s assets, which include one airplane and its 25% share in ground handling company Swissports Cyprus Ltd, are slim, the minister said. “Workers and creditors are first in line,” he said.

“The experiment of national carriers failed,” Demetriades said. “It failed in the EU and it failed in Cyprus”.

In order for the new Cyprus Airways to succeed which will be free from old financial burdens, it will be “a strictly private company, run the way private companies are run,” the minister said.

Demetriades said that the creation of a new airline with the “small” participation of the government in its share capital will also have to get the green light from Cyprus’s international creditors. “You will have to explain why this procedure has to be initiated”.

Source: Cyprus Mail