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Lusa - Business News - Cabo Verde: CVA to cut workforce from pre-pandemic 300 as first flight cancelled




Praia, June.21,2021(Lusa)-Cabo Verde Airlines (CVA) is to reduce its workforce, which stood at more than 300 people before the pandemic, due to the drop in activity, the company's chief executive officer, Erlendur Svavarsson, told Lusa.
"The reduction of activity imposed on the company due to blockades, border closures and other restrictions in the face of the Covid-19 pandemic will inevitably lead to a reduction in the number of workers," said Svavarsson in comments to Lusa, regarding CVA's plan to resume activity after 15 months of suspension due to the pandemic.
"The company will comply with all relevant legal requirements in contacts with unions on the best way to address such delicate and important issues," the CEO said, without giving figures for the planned job cuts.
Cabo Verde's National Union of Civil Aviation Pilots has in recent days revealed that CVA intends to reduce by 40% its total number of pilots, including through early retirement and non-renewal of contracts.
CVA was to have resumed operations on Friday, with a flight from the island of Sal to Lisbon and back, but it was eventually cancelled after a dispute with ASA, the state-owned that manages Cabo Verde's airports and airspace, which failed to authorise the departure. So far ASA, CVA and the government have provided no clarification of the matter.
The company had been counting on gradually resuming activity, initially with weekly flights to Lisbon, using a Boeing 757, an operation it planned to extend in July with a second aircraft, and flights to Boston and Paris. That contrasts to the dozen or so international destinations it served before the pandemic, with three aircraft.
In March 2019, the Cabo Verde state sold 51% of then public company TACV (Transportes Aereos de Cabo Verde) for €1.3 million to Lofleidir Cabo Verde, a company owned 70% by Loftleidir Icelandic EHF (the Icelandair group, which took 36% of the newly created CVA) and 30% by Icelandic entrepreneurs with experience in the aviation sector (who took over the remaining 15% stake of the privatised stake of 51%).
CVA, in which the state has a 39% stake, then focussed its activity on international flights from a hub on Sal, no longer offering domestic flights.
In an interview with Lusa in April, Svavarsson said that the company's financial situation was "especially good", while stressing that the state had not injected any funds but only supported CVA in the form of guarantees for bank loans.
"In fact [the Cape Verdean state] has not injected any funds, unlike our competitors SATA and TAP, which continue to receive contributions from the [Portuguese] state," he stressed at the time. "The Cabo Verde government has been very diligent with public resources and has not given any money to CVA so far. Only guarantees, which means that the company is having access to loans, which now represent sufficient funds to take the next step in the company's refinancing process."
SATA and TAP are the only airlines that offer regular flights from the Cabo Verde islands of São Vicente, Sal and Santiago to Europe and the US, with both receiving Portuguese state funding due to the consequences of the Covid-19 pandemic.
The CVA boss stressed that since March of last year it had been possible to keep on the more than 300 workers but on furlough, thanks to the simplified programme created by the government to support companies affected by the pandemic, as well as not renewing sort-term contracts.
The Cabo Verde government in late February announced an agreement with the company's management to resume operations and renegotiate its loans, also involving the Icelandair group, which supplies the company's aircraft through Loftleidir.
On the basis of that understanding, the government on 6 March authorised a fifth state guarantee for an emergency loan request from CVA's management for €12 million, bringing the total requested by the company since November with a state guarantee to almost €20 million, on Lusa's calculations.
The new agreement with the government foresees the reduction from three to two aircraft and the resumption in the short term of flights to Portugal and the US, to serve the sizeable Cape Verde communities in those countries. In return, the state is to reinforce its position on the board of directors, so gaining real decision-making power.

PVJ/ARO // ARO
Lusa


Agency : LUSA

Date : 2021-06-22 10:21:00







 

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