S7 Airways No Longer Wants Its 37% Share In Cyprus Airways

S7, a private aviation group in Russia, is reportedly looking to sell its stake in Cyprus Airways. The group has held a 36.8% stake in the airline since 2016 after the airline went bankrupt in 2015. The S7 group’s new airline Charlie Airlines, which operates as Cyprus Airways, launched in 2017.

S7 Airways No Longer Wants Its 37% Share In Cyprus Airways
Russian aviation group S7 is looking to sell its 37% stake in Cyprus Airlines. Photo: Getty Images

Pulling out because of the pandemic

According to reports, the Russian group S7 wants to pull out of the Cypriot airline because of the effect of the pandemic. While this wouldn’t be that unusual given that plenty of airlines have had to change plans because of the pandemic’s financial impact, S7 has a slightly different reason for moving away from the airline.

S7 was previously using the airline to get a better understanding of European aviation regulations as well as understanding the European market. In 2016, when S7 bought the rights to the airline’s name, livery, and image, the group was interested in learning more about operating under a European license.

However, due to the pandemic, much of that has changed. Slots rules have been relaxed, governments have bailed out airlines, and the current market can hardly be considered a good example of traditional European aviation.

S7 Airways No Longer Wants Its 37% Share In Cyprus Airways
Cyprus Airways went bankrupt in 2015, and the S7 group bought the rights in 2016. Photo: Florian Klebl Via Flickr

While the group hasn’t confirmed the exact reason it wants to pull out of its European venture, selling its stake in Cyprus Airways will allow it to focus on the Russian market. S7 has always maintained a strong domestic network with good links to parts of Asia. However, it also has a strong network of destinations in Europe, including Paris, Rome, Barcelona, Munich, Vienna, and of course, Cyrpus.

Just yesterday, the group launched ticket sales for a new route connecting Moscow to Casablanca. We may see more routes over the coming year, as the airline looks to take on its biggest competitor, Aeroflot.

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One airline with two names

S7 initially invested in Cyprus Airways in 2016. The struggling national carrier had gone under the year before, and the airline branding was the property of Cyprus’s Finance Ministry. The timing was perfect; in March 2016, Russia and Cyprus signed an air liberalization agreement, and the Cypriot government needed a new airline.

Cyprus Airways A319 Getty
The Cyprus Airways brand still belongs to the Cyprus Finance Ministry, but the airline’s only planes belong to S7. Photo: Getty Images

S7 invested financially, acquiring the rights to operate under the Cyprus Airways name for the newly created Charlie Airlines. Charlie Airlines has the right to use the Cyprus Airways brand for ten years with the option of another five years if needed. Of course, that won’t be necessary now. S7 admitted that it was interested in the European market and sent two of its own Airbus A319s for the new Cyprus Airways to use.

The two aircraft remain the airline’s only aircraft, and one is currently in storage. With S7 looking to sell its 37% stake in the airline, the Cyprus Government will need to look for a new investor. Cyprus Airways’ only aircraft technically belong to S7, so a new investor would need to bring their own planes or be prepared to source new ones.

Perhaps, the brand will live on with a new investor, or perhaps the government will use this time to relaunch the national carrier itself. However, there is always the possibility that, six years after it went bust, the Cyprus Airways name will be resigned to the history books.

What do you think of Cyprus Airways? Will S7 be able to find an investor? Get in touch and let us know your thoughts in the comments.