Hundreds stranded by Cyprus Airways pilot strike

NICOSIA, Mar 11 (Reuters) Hundreds of passengers were stranded in Cyprus today in a wildcat strike staged by pilots of national carrier Cyprus Airways over a restructuring plan involving pay and job cuts.

Eighteen outbound flights from the holiday island scheduled for Saturday were cancelled after pilots called a 24 hour walkout.

Authorities said they were in discussions with the pilots to call off the strike, and warned that an escalation would trigger the collapse of the company.

Management and pilots have been at odds for months on the restructuring plan which will lay off a quarter of the workforce at the cash-strapped carrier. It posted pre-tax losses of 25.03 million Cyprus pounds (52.14 million dollars) in 2005.

''The company has many financial problems. If the measures continue there is the risk of financial collapse ... That way it becomes easy prey for private operators,'' Communications Minister Haris Thrassou said.

At Larnaca airport, the Mediterranean island's principal air terminal, passengers leaving on a pre-dawn flight to London Heathrow were either stranded, or took connecting flights through central Europe on other carriers.

The state owns up to 70 per cent of Cyprus Airways, with the remainder of its shares traded on the stock exchange. ''Selling the carrier is not the government's intention,'' Thrassou told Reuters.

Once a suitor to acquire equally troubled Olympic Airways of Greece, Cyprus Airways has struggled in recent years from fleet renewal costs and cheaper competition.

''It has lost 100 million (Cyprus pounds) in the past three years,'' said Thrassou. Part of the restructuring, which includes outsourcing, are across the board paycuts for remaining staff.

Consultations are also underway to spin off the charter arm of Cyprus Airways, Eurocypria, to create a second debt-free airline.

Cyprus Airways is awaiting European Union approval for a government-backed loan. As an EU member, Cyprus is not permitted to subsidise its national carrier directly.

REUTERS CH PM1456