Cyprus’ national airline shuts down after EU ruling

Cyprus’ national airline shuts down after EU ruling

HomeEuropeEU Sat Jan 10, 2015 12:40AM
http://www.presstv.com/Detail/2015/01/10/392394/Cyprus-airline-stops-flying-after-EU-ruling

Cyprus has announced an immediate halt to flights by its national carrier after the European Union ruled that it had illegally received millions of euros in state aid.

The Mediterranean island nation’s Finance Minister Harris Georgiades said on Friday that Cyprus Airways will cease operations right away.

He also added the airline was no longer “economically viable” after the recent decision from Brussels.

“With the European Commission’s decision, the company ceases to be a financially viable unit and will immediately lose its license,” media outlet quoted Georgiades as saying.

This came after EU regulators ordered Nicosia to recover illegal state aid granted to the ailing airline. The European Commission has ruled that Cyprus Airways, which is nearly 94 percent government-owned, must pay back over 65 million euros out of a 103-million-eauro state aid package it received in 2012-13.

The government of the small recession-hit EU member state said in an official statement that the airline ticket-holders would be offered alternative arrangements.

“Following today’s decision for immediate termination of the flight program of Cyprus Airways, the Cyprus government decided to offer alternative arrangements to all passengers who have in their possession tickets of Cyprus Airways flights,” the statement read.

The company, founded in 1947, struggled due to years of mismanagement as it could no longer compete with new low-cost airlines that grabbed huge chunks of its business.

The island’s Communications Minister Marios Demetriades has said plans are underway to set up a new company with private backing that will bear the Cyprus Airways name and logo.

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