Cyprus Airways (1947) (Larnaca) board members have been replaced by the Cypriot government a day after chairman Makis Constantinides resigned and was replaced by his deputy, Marinos Kallis.
“Due to a serious malfunction recently recorded at the board of directors of Cyprus Airways, but also due to the urgent need for an effective handling of the difficult situation unfolded in the company, a radical restructuring of the administrative board was necessary,” a statement issued to the Cyprus Mail said.
After neither Ryanair's nor Aegean Airlines' business plans for the carrier were accepted, government went about crafting an emergency survival plan aimed at prolonging the struggling airline's fast dwindling cash reserves.
Employees this week reacted angrily to a leaked copy of the plan which would see the airline's fleet cut from the current six to three in addition to a drastic pruning of unprofitable routes. Overall, half the airline's workforce of 460 would be cut while pilot salaries will be slashed and all collective bargaining agreements frozen.
Cyprus Airways management is currently awaiting feedback from Brussels concerning a European Commission investigation into the legality of over EUR101.3million (USD128.4million) in Cypriot government aid granted to Cyprus Airways in 2012 and 2013.
A negative verdict, which would require Cyprus Airways to reimburse all funds availed, would bankrupt the carrier.
