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The Cyprus Government are looking at ways to merge the state-owned charter airline Eurocypria with Cyprus Airways, in order to aid the ailing airline.
 

The state holds a 70% share of Cyprus Airways where as Eurocypria is 100% owned by the Government.
 

The report on the merger is being carried out by consultants KPMG, and should be ready in three weeks’ time, Finance Minister Charilaos Stavrakis told the unions yesterday. Its purpose is to ‘explore operational synergies’ between the two airlines.
 

The Finance Ministry will then initiate a round of consultations with the unions of both airlines to discuss the report’s findings. Trade Unions representing employees of Eurocypria have said that in principal they are not opposed to a merger with Cyprus Airways.
 

A merger poses the question of EU approval. When Cyprus Airways sought government guarantees for loans of €78 million in 2007, the European Commission (EC) gave the green light on condition Cyprus Airways would not merge with Eurocypria until 2016.
 

The government is banking that a merger proposal backed up by a detailed report from a reputable consultancy will convince the European Commission to revisit the matter.