Yet Another Semi-Bankrupt Semi-Government Firm Propped Up - Opinion
Yet another semi-bankrupt semi-government organisation has been propped up by the state after the House of Representatives approved a 31.3 million-euro budget to increase Cyprus Airway's share capital.
For the last year we have heard repeated warnings from Cyprus Airways that if it doesn't receive additional capital it will go out of business. It joins Popular Bank which has been nationalised and is waiting in line for a 1.8 billion-euro payout the government plans to negotiate with the Troika. But will these organisations go the way of Eurocypria, another state-owned company that went bust and closed down?
How can Cyprus Airways, an organisation which has been subsidised by the state for decades - and even receives millions in annual compensation for not being able to fly over Turkish airspace - still manage to end up with no money? How, after so many years of being in the EU with its anti-monopolistic orientation, did Cyprus Airways miss the point that it would have to get competitive, lean and mean but quick?
It's a good thing that parliament demanded a change in the company's board of directors and said that half of the 31.3 million would not be handed over until its conditions are met. It's a good thing that Cyprus Airways has been told to make a strategic partnership with a low-cost carrier and get some help in the form of a foreign expert adviser.
Where does the government plan to find this money? The Troika? Is the Troika now supposed to plug up all the government's leaky companies? The taxpayer? Perhaps they've forgotten about the economic recession?
Russia? Is Russia excited about the prospect of shoring up a failing state-owned airline?
Saving as many jobs as possible is a worthy goal, no one's saying that this is not true. But this habit of last-minute, fly-by-the-seat-of-your-pants approach has to stop. It's time to get real before CA goes the way of all the other inefficient state-owned airlines that had to shut down at the end of the day.
The first step would be in actually implementing the cost-cutting measures the board keeps talking about, instead of dangling them like carrots in front of the weary taxpayers' eyes so the organisation can get the next multi-million cash injection.
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