The European Commission is investigating the latest plan to rescue Cyprus Airways and is considering whether the €102 million in state aid – which includes a €31.3m ($42.4m) capital injection granted in 2012, a conversion of €63m ($85m) debts into equity and €8.6m ($11.6m) to cover the deficit of the company's employee benefit scheme – complies with EU state aid rules.
The commission has expressed doubts “whether the restructuring plan is suitable to ensure Cyprus Airways' long-term viability and whether the airline is capable of withstanding likely challenges in the air transport market during the next years”.
Cyprus Airways has already received aid in 2007 as well as a 2012 capital injection and a €34.5m ($46.7m) rescue aid loan in 2013, which could cause this latest aid to fall foul of the commission’s rule that airlines can only receive restructuring aid once over a ten-year period to avoid inefficient airlines being kept "artificially alive with repeated subsidies".