Cyprus seeks bids for national carrier

Cyprus is seeking non-binding proposals to take over national carrier Cyprus Airways by Friday, the island’s transport minister said yesterday. 

The government wants a strategic investor to take over Cyprus Airways, a state-controlled airline which has been making losses for years.

Ryanair, Europe’s largest budget airline, and Greece’s Aegean are among firms which submitted non-binding expressions of interest last month for the carrier, the only domestic airline in Cyprus.

About 15 interested parties, with which authorities have signed non-disclosure agreements, should submit non-binding business proposals by the end of this week, communications and works minister Marios Demetriades said.

The parties would then be shortlisted, and asked to submit binding offers.

“We hope that by the end of September, or the beginning of October we will have concluded on the best solution,” Demetriades told reporters.

Ryanair boss Michael O’Leary said last week that the airline would propose it could boost Cyprus Airways’s passenger numbers to 3m per year from 600,000 currently, down 50% from peak. Ryanair representatives met with the Cypriot government on Friday, while yesterday, Aegean executives were to meet with authorities.

Cyprus Airways has seen profit margins tumble over the years as cheaper competitors, Ryanair included, have encroached onto markets once considered a virtual monopoly. It has gone through several restructurings and sold assets to remain in business.

It is also under European Commission scrutiny for receiving state aid in violation of competition rules.