Cyprus Airways is in serious financial trouble and could go to the wall unless they receive urgent financial help. The Cypriot government are trying to get permission from Brussels to invest 17 million euros into the troubled travel company.
If Brussels do not give permission then it is high likely that Cyprus Airways will be forced into bankruptcy, this will cause thousands of jobs to be lost and an embarrassment to the Cypriot government.
The European Commission is not in favour of the bail out and have already expressed their concerns in trying to save the airline. It was only in March when the commission launched an inquiry that they found the rescue attempts to be in breach of EU laws on state aid.
Last year Cyprus Airways received 73 million euros and received another 31.3 million in January but still it seems the airline is in serious financial trouble and travel experts have said, no matter how much money is invested into the airline, it will still continue to be a loss making company with serious debts until the board is changed and serious adjustments are made to the running of the company.
Cyprus Airways made a loss of 55.8 million euros last year but Cypriot finance minster feels the airline is worth saving.
He said: “We feel a locally-based carrier will give service to the economy. It won’t be profitable without radical decisions.”
If the government is not allowed to help the airline then it is feared that no private investor will come forward which would then mean the end of the troubled airline.
By Diane Walker