European Commission – Press release
Brussels, 09 January 2015
Following an in-depth investigation, the European Commission has concluded that a restructuring aid package of over €100 million for Cyprus’ ailing flag carrier Cyprus Airways gave the company an undue advantage over its competitors in breach of EU state aid rules. Cyprus Airways therefore needs to pay back all incompatible aid received, which according to the Commission’s information amounts to over €65 million plus interest. In particular, the Commission found that Cyprus Airways had no realistic perspective of becoming viable without continued state subsidies.
Under the applicable EU guidelines on the rescue and restructuring of companies in difficulty, a company can only receive restructuring aid once over a period of ten years („one time, last time” principle). This is to avoid that market players rely on public money instead of running an effective business and competing on the merits. Cyprus has provided no evidence that Cyprus Airways faced exceptional and unforeseeable circumstances that would justify an exemption from this principle.
Next week ECTAA advisers will offer more information on this case that may resemble MALEV case.
Update:
On Friday 9 January 2015, the Board of Cyprus Airways decided to suspend operations following the order of the European Commission (DG Competition) to recover incompatible state aid from the national air carrier.
As confirmed by the Cyprus Airways, the affected passengers, who have arranged their travel with departure days up to and until 9/2/2015, can immediately contact the travel agency Top Kinisis Travel Public at the national telephone number 77787878, or if they are calling from overseas at the telephone number +357 22869999, in order to arrange for the issuance of a new flight ticket. For the remaining passengers, with departure date from 10/2/2015 and onwards, a new announcement will be made in the coming days.
More information may be found here: http://cyprusair.com/default.aspx?tabid=843&langid=2
ECTAA welcomes the adoption of emergency measures by the Cypriot government and main stakeholder of the national flag carrier to provide passengers with alternative tickets and routings. This is a positive change compared to the passengers of the airlines Spanair and Malev, which ceased operations at the beginning of 2012, where passengers were not provided with the same assistance and
where some are still waiting to be refunded today.
This unfortunate case once again stresses the fact that there is no protection for passengers within the EU when an airline suspends operations in particular in the case of financial failure.
While a similar protection is already in place for citizens travelling under a package travel contract with a tour operator, ECTAA and its 32 Members Associations deplores the reluctance of the EU legislator to adopt an appropriate legislation to protect EU air passengers.
In the last decade there have been more than 96 European airlines which have filed for bankruptcy, each time leaving thousands of passengers stranded and even more airline customers with no hope of getting a refund for their prepaid tickets.
ECTAA urges the European legislator to translate the European Parliament resolution of 25 November 2009 on passenger compensation in the event of airline bankruptcy into a mandatory legislation. The European Parliament has proposed a specific amendment to the legislative proposal revising the air passenger rights, entitling passengers to re-routing or refund in case an airline goes bankrupt, is suspended or ceases operations. Unfortunately this amendment is not supported by the Commission
nor the Member States.
Lars Thykier President of ECTAA: After the financial failures of SPANAIR, MALEV and many other airlines, with tickets worth millions of Euros non-refunded, the unfortunate situation of Cyprus Airways highlights once again the absolute need for a European scheme to protect air travellers.
Update 2:
Please be informed that all non-Cypriot agents may contact Top Kinisis Travel Public for passenger refund, by email, at Lydia@topkinisis.com and tel +35722869719 for their best service.
Update 3:
The agreement between Top Kinisis and the Cyprus government to process re-routings and refunds of CY tickets has been officially extended from 10 February 2015 until 25 October 2015 .
Contact details with Top Kinisis remain as follows:
Email: Lydia@topkinisis.com
Tel. +35722869719
