Cyprus Airways is to exit three routes in the Greek domestic market, axe nearly 500 staff and seek to sell two aircraft as it tries to stem its financial losses.
From 1 July, the Cypriot flag carrier will suspend routes between Athens and Thessaloniki, Heraklion and Rhodes.
Nicosia-based Cyprus Airways plans to remove one A319 from its fleet in November, and intends to repeat the process for a second, in adherence with a rescue plan under which the fleet is to be reduced from 10 aircraft to six. Flightglobal's Ascend Online database shows that the airline leases two A319s from International Lease Finance (ILFC).
UK-based Cabot Aviation confirms that it is in the process of selling the last of seven International Aero Engines V2500-A1-powered A320s it was selected to remarket on behalf of Cyprus Airways.
The airline says is also pressing on with plans to lay off 490 of its 1,040 staff, having estimated the cost of delay at €100,000 ($130,000) per day and over €30 million since last year.
Entitlements for staff who are part of the Cyprus Airways provident fund will be honoured, says the carrier.
Cyprus Airways posted €55.8 million pre-tax loss for 2012.
The European Commission has opened an investigation into whether a number of loans and capital injections made by the Cypriot government to its national carrier and "ex gratia compensation" to redundant personnel constitute illegal state aid.