Cyprus Airways (1947) (Larnaca) could be forced to repay over EUR101.3million (USD128.4million) in Cypriot government aid granted to it in 2012 and 2013 the Phileleftheros daily has reported.
Quoting sources in Brussels, the paper says the European Commission's investigation into Nicosia's funding of Cyprus Airways would likely result in the carrier being forced to repay the funds; a move which would bankrupt the already struggling airline.
The airline reportedly has only EUR31million in reserve which it acquired when it sold off its London Heathrow slots to MEA - Middle East Airlines (ME, Beirut) and American Airlines (AA, Dallas/Fort Worth) earlier this year. Airline chairman, Makis Constantinides, has said the funds should only be used in extreme emergencies which could precipitate very soon given the recent end of a poor summer season and the onset of the upcoming, traditionally-tight, winter season.
The EC's decision will also affect Nicosia's talks with nine entities which have submitted bids for a stake in the struggling carrier. Though negotiators have been given an October 27 deadline in which to reach a final agreement, a postponement is possible give that Brussels will only make public its decision concerning state aid to the carrier once EU Competition Commissioner-designate, Margrethe Vestager, has taken office.
