Eurocypria Stops Operations in November
State-owned charter airline Eurocypria is set to stop operations on November 13th after it merges with Cyprus Airways, said SEK union head Elisseos Michael.
According to Michael, Eurocypria staff are to be transferred to CA with all current benefits stemming from union contracts. Redundancies will be decided upon by the new CA-Eurocypria management, he said.
However, CA union leaders are opposed to adding Eurocypria's staff without an agreement on redundancies, saying that the company cannot afford more staff given recent financial losses.
The decision to merge the two ailing airlines came after Cyprus Airways reported a 25 million euro loss for the first six months of 2010, compared to a loss of 3.8 million euros for the same period in 2009. In May this year, Eurocypria asked the government for another 35 million euros to cover its debt payments.
Over the last year a spate of low-cost airlines have gone into administration amid a global economic slowdown. However, as European economies slowly recover, hopes are rising that tourism will track the recovery, say analysts.
Observers in online fora say that the new competition from Ryanair may trigger a price war, which could benefit travellers by lowering ticket fees. Local charter airline Eurocypria in particular would have faced even more headwinds as the competition heats up.