Turkish Cypriot airline grounded

The future of Cyprus Turkish Airlines (CTA) hung in the balance yesterday after the Turkish Civil Aviation Office (TSHD) in Turkey ordered the grounding of all its aircraft from midnight on Monday because of mounting debts. “Tens of thousands” of passenger booking could be affected, according to officials at CTA.

It is believed the airline is losing around 3.5 million dollars monthly and has run up debts of around 120 million dollars.

The move came just hours after an announcement by the Turkish Cypriot ‘communications and works minister’ Ersan Saner saying CTA had signed an “agreement in principle” that would see 50 per cent of the debt stricken carrier sold off to private Turkey-based Pegasus Airlines and would be reborn under the name ‘New Turkish Cypriot Airlines’ other reports said.

The Turkish Cypriot authorities were yesterday said to be “in shock” over the TSHD’s decision, which effectively grounds the ‘national carrier’ for the next three months.

Yesterday, three of CTA’s jets were on the ground at Ercan (Tymbou) Airport while another remained at Istanbul’s Ataturk Airport, having been seized by bailiffs representing one of the airline’s debtors. The Turkish Cypriot authorities and CTA were yesterday struggling to find stranded passengers alternative flights.

CTA’s troubles came to light last month when Turkish Technics, a company providing ground services for CTA, called in 12 million dollars worth of debt. On Monday, bailiffs representing the company seized of one of its jets pending payment of the debt.

As the crisis had loomed, the Turkish Cypriot authorities sought bids from private companies that could either financially bail out of take over the running of CTA. It had been assumed that a lone bid from Atlas Jet, another private Turkish airline, would result in CTA being run by Atlas for the next five years. However, it appears that Atlas was dropped and replaced by Pegasus Airlines, which is owned by Turkey’s wealthy Sabanci family.

According to reports from the north, the deal will involve Pegasus becoming a 50 per cent shareholder in CTA. Atlas Jet’s earlier proposal had been met with stern opposition from the unions representing the 670 staff at CTA, many of whom would have reportedly been laid off in the event of a deal. The Pegasus deal will however allegedly see the majority of exiting staff re-employed in the new partnership. Those who are not reabsorbed will be employed by ground services at the second airport in the north at Lefkoniko, the running of which has just been awarded to fugitive tycoon Asil Nadir. CTA offices abroad will however be closed down, reports said.

Reacting to the latest developments, HAVA-SEN, the union representing the majority of CTA employees said it would continue its struggle to protect its members’ jobs and called on them to strike in opposition to the Pegasus deal. Apart from losing their jobs, the strikers say the deal will sound the death knell for the Turkish Cypriot ‘national carrier’.

The authorities however laid the blame for the collapse of the airline at the feet of the unions, saying that if CTA employees had accepted it 15 per cent pay cut proposal, the airline could have survived without the need for a buyout. Speaking after the decision to strike was announced, ‘communication and works minister’ Saner said, “Who will it benefit if the staff of an airline that has been grounded go on strike?”

Source: Simon Bahceli, cyprus-mail.com – 23rd June 2010