Brussels, 07/03/2007 (Agence Europe) - On 4 March, the European Commission authorised a restructuring plan for Cyprus Airways unveiled by Cyprus in May 2005.
The plan involves a loan of CYP 55 million (€96 million) of which CYP 45 million (€78 million) is backed by government guarantee and the sale of Cyprus Airway's charter wing Eurocypria to the government for 13.425 million (€23.6 million) as long as the two state-owned airlines are run as effective and independent competitors; ongoing cost cutting necessary to restore the airline's viability; and a capital injection of CYP 14 million (€24 million) involving public and private shareholders.
On 22 March 2006, the Commission decided to launch an investigation because of doubts as to whether certain parts of the plan complied with EU restructuring aid rules. (aby)