BRUSSELS - European Union competition regulators are investigating whether €104m in state aid granted to Cyprus Airways complies with EU state aid rules.
The European Commission said it doubted that the airline's capital increase, with a €31.3-million-euro contribution from the Cypriot state, was conducted on market terms.
"In view of the company's financial difficulties and viability prospects the majority of private shareholders decided not to participate in the capital increase," the EU executive said in a statement.
It is also looking into a €73m rescue loan provided by the Cypriot authorities in December last year.
"The Commission also doubts whether there is a credible restructuring plan for Cyprus Airways," the EU watchdog said.