Cyprus airline Cobalt halts flights amid lack of investment

  • Passengers walk in front of Cobalt air ticket office at Larnaca international airport, Cyprus, Thursday, Oct. 18, 2018. Cyprus-based airline Cobalt Air says Thursday it has indefinitely suspended all of its operations amid a struggle to find investors. (AP Photo/Petros Karadjias)

  • Airport departure board showing the Cobalt flights cancelled at Larnaca international airport, Cyprus, Thursday, Oct. 18, 2018. Cyprus-based airline Cobalt Air says it has indefinitely suspended all of its operations Thursday, amid a struggle to find investors. (AP Photo/Petros Karadjias)

NICOSIA, Cyprus — Cyprus-based airline Cobalt Air suspended its operations indefinitely after failing to find new investors to keep it in flight, officials said Thursday.

As stranded passengers scrambled to find alternate flights, Cyprus’ government said it would compensate Cobalt Air ticketholders who end up with other carriers to get to and from the Mediterranean island.

The Cypriot transport ministry said in a statement that passengers would be compensated for one-way, economy class tickets on other carriers up until Oct. 24. Cypriot travel agencies Orthodoxou Travel and Top Kinisis were authorized to book return flights.

“We feel the need to help passengers who are stranded either in Cyprus or abroad and want to return to their place of residence,” Transport Minister Vassiliki Anastassiadou said.

Cobalt flew to 22 destinations in Europe and the Middle East. Its six Airbus passenger jets have been grounded, although the airline still exists as a legal entity.

A senior executive from the airline, Philokypros Roussounides, told The Associated Press said passengers were eligible for full refunds whether they paid by credit card or made arrangements through travel agencies.

Cobalt Air Chairman Grigoris Diakos said the airline ceased operations after its backers halted financing and a search for new investors led nowhere. There’s still a chance to save the airline if it keeps its licenses long enough to sound out potential new investors, Diakos said.

However, a Transport Ministry official put a damper on the airline’s possible revival, telling state-run Cyprus News Agency late Thursday that the licensing authority already rescinded Cobalt’s operating license.

Permanent Secretary Alecos Michaelides also ruled out the prospects of new investors. Despite the airline’s existing Chinese backers pouring some 100 million euros ($115 million) into the company, it posted losses of 30 million euros ($34.5 million) for each of the last three years, Michaelides said.

In a statement, Cobalt Air called the shutdown “a sad day” for the airline and its employees after “working relentlessly during the last months to secure long-term financing.”

Cobalt Air began flying in 2016 in the wake of the collapse of national carrier Cyprus Airways. It was recognized as the best startup airline of 2017 by industry analysts CAPA-Centre for Aviation.

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