Aegean Airlines (A3, Athens Int'l) and Ryanair (FR, Dublin Int'l) are the only two airlines the Cypriot government has shortlisted in the race to acquire fast sinking Cyprus Airways (1947) (CY, Larnaca). With the end of the tender process this week, the Cyprus Mail reports government received nine bids in total but asked only Aegean and Ryanair to submit business plans.

Among the other contenders were Arkia Israeli Airlines (IZ, Tel Aviv Ben Gurion), a "prominent" Russian investor with Swiss citizenship, "Cyprus Air" - a bid led by a Cyprus Airways pilot working alongside another Russian investor, the Arevenca Group (a joint-venture between flyAruba (Aruba) and Spain's Triple Five Group), Blue Air (Romania) (0B, Bucharest Otopeni), and S7 Airlines (S7, Novosibirsk).

The decision to choose Aegean and Ryanair has caused much concern among Cyprus Airways employees who consider both to be “hostile”. Airline unions fear a buy-out by either party will lead to massive redundancies and/or major pay cuts. At an AGM held on Wednesday, the airline's unions issued a joint statement demanding government ensure employees' jobs as part of the privatisation process.

In the wake of the talks, Cyprus Airways' financial situation has continued to deteriorate with reports the airline's board has drafted an emergency plan which would allow the national carrier to survive for a further 6 to 8 months. The plan entails the freezing of collective wage agreements for at least six months.

All eyes are currently on the European Commission with a ruling on whether a EUR73million rescue package in 2012 and a EUR31.3 million capital increase in early 2013 violated EC state-aide regulations due out soon. Finance minister Harris Georgiades has warned that a ruling against the airline is likely adding that the forced repayment of aid would likely lead to Cyprus Airways' collapse.