Brussels, 3 May 2005
Rescue aid for Cyprus
The Commission decided today to authorise rescue aid for Cyprus
Airways, the Cypriot flag carrier. The aid consists of a CY£ 30 million
(€ 51 million) loan guarantee for the next six months so as to allow the
authorities to organise the restructuring of the airline.
The Commission has examined the rescue aid for Cyprus Airways and checked
that it complies with Community rules, notably:
- The aid is in the form of a loan guarantee of € 51 million (CY£
30 million) granted at market rates.
- The amount of aid is limited to what is needed to manage the short term cash
flow deficit of the company.
- The Cyprus authorities have undertaken to furnish the Commission with a
restructuring plan for Cyprus Airways within six months of authorisation of
payment of the aid.
- The aid is also warranted on the grounds of serious social difficulties.
2400 staff members work directly for companies within the Cyprus Airways group,
which is not an inconsiderable number given the size of the total Cyprus
- The possibility of the aid having any adverse spill-over effects on other
Member States is limited by its size, its short duration and the relatively
small size of the