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Cobalt airlines, the largest Cyprus-based airline, was expected to ground its flights as of midnight on Wednesday, after reports said that the company failed to reach a deal with a potential European investor.

According to Economy Today, the company has only €15 million its accounts, which are expected to be used to pay the employees.

The transport ministry told the website that they are on standby to ensure that no passengers are affected by the issue.

In statements on Wednesday night transport minister Vasiliki Anastasiadou said she could neither confirm nor deny the news the airline was heading towards closure.

But she said: “Without having any legal obligation, we will of course ensure that we help the passengers.”

Anastasiadou added that the ministry is expecting official information from the airline on Wednesday night, and that they will release a statement following the company’s statement.

All of the airline’s flights for Wednesday are expected to arrive as scheduled with the last one coming in to Larnaca International Airport from London’s Heathrow at 12:10am, according to the Hermes airport’s website.

Calls to Cobalt’s 24/7 customer service centre from both their local number and their number for individuals that are abroad went unanswered.

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 has been monitoring the airline for some time but reports said that to date the airline has been consistent with all its payments (salaries, etc) as well as with its aircraft maintenance obligations, while its flight operations are unaffected.

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.

Source: CyprusMail