The European Commission decided on Wednesday to start the official procedures for the investigation of the Cyprus Airways restructuring plan proposed by the Republic of Cyprus in November 2005 to restore the viability of the national carrier.

According to the relevant announcement published by newspaper “Naftemporiki”, the European Commission has doubts on whether the plan is in line with the EU framework for the restructuring of the problematic business.

In May 2005, the Commission had approved the granting of a loan with state guarantee of £30 million, including the obligation on behalf of the Cyprus authorities to publicize the restructuring plan.

According to “Naftemporiki” the Commission is not in the position to evaluate the exact state aid that the plan might include and cannot decide whether the aid fulfills the EU requirements.

“The start of the procedures for the investigation of the Cyprus Airways restructuring plan entails that there are several abeyances that raise doubts. Tomorrow, we will receive a letter by the EU. We will examine it and we will state our views”, Cyprus Airways Chairman, Lazaros Savvides told StockWatch.