Cyprus Mail - article by Peter Michael 17 October 2018
Cobalt airlines, the largest Cyprus-based airline, grounded all its flights as of midnight on Wednesday, after reports said that the company failed to reach a deal with a potential European investor.
All flights were cancelled after the last one which arrived at Larnaca airport from Heathrow at 12.20 on Thursday morning.
The Cobalt website instructed passengers who have unused tickets not to go to Larnaca airport or any departure airport on Thursday as no Cobalt flights would be operating and no Cobalt staff would be present.
The transport ministry said in a statement that passengers expecting to fly with Cobalt on Thursday should secure one-way tickets in economy class from another airline, and keep their receipt for their reimbursement.
Passengers expecting to travel with the airline for the seven days following Thursday will be informed promptly about travel procedures, the ministry said.
It was not immediately clear how many passengers would be affected, but nine flights had been scheduled to arrive and further nine to depart at Larnaca airport on Thursday. In all, the airline flew to 23 destinations.
In a statement on its website the airline said: “Cobalt regrets to announce that it will be cancelling all Flights as of 23:50pm on October 17, 2018 due to indefinite suspension of Cobalt’s operations. As a result, future flights or services provided by Cobalt will be cancelled and will no longer operate”
Cobalt informed the ministry and the Aviation Licensing Authority about their decision late on Wednesday night. The authority called for a meeting on Thursday with the shareholders to discuss the issue.
The company is expected to officially file a stop in operations statement to the ministry on Thursday as well.
In statements earlier on Wednesday night transport minister Vasiliki Anastasiadou said: “Without having any legal obligation, we will of course ensure that we help the passengers.”
According to Economy Today website, the company has only €15 million its accounts, which is expected to be used to pay the employees.
In early October rumours began circulating that the budget airline was facing cash-flow problems after two of its aircraft were grounded for two days, causing delays to certain flights.
Reportedly, the reason was that Cobalt had not paid the monthly leasing fee to the American company that owns the two planes.
The company posted losses for the year 2017, while in May this year the airline sacked its CEO Andrew Madar.
According to local media, earlier this week the Air Transport Licensing Authority (part of civil aviation) summoned Cobalt officials to a meeting.
Civil aviation had been monitoring the airline for some time but reports said that the airline had been consistent with all its payments (salaries, etc) as well as with its aircraft maintenance obligations.
Officially, Cobalt has declined comment. But sources within the company attributed the liquidity problems to a difficulty by Chinese investors to export capital due to Chinese government restrictions.
The airline’s main stockholders are AJ Cyprus, holding 49 per cent of the shares. AJ Cyprus is owned by Chinese Avic Joy Air.
The airline employs around 200 people.
Cobalt stepped in to replace bankrupt Cyprus Airways, which shut down in January 2015.
The low-fare airline began operating in 2016. Its fleet consists of two Airbus 319s (144 seats) and four Airbus 320s (156 seats).
In 2018 the airline flew to 23 destinations.
The Cyprus Tourist Agencies Association is expected to hold a meeting on Thursday to discuss the issue.
The association’s head, Vasilis Stamataris, described the closure of Cobalt as “a great loss.”
