Businessman Constantinos Loizides resigned as chairman of Cyprus Airways and as general manager of Hellenic Bank late Wednesday.

His resignation from the airline was confirmed by Transport Minister Haris Thrasou, while a statement from Hellenic Bank also confirmed his resignation, only a day after the bank had dismissed reports speculating that he was about to be fired.

His resignation from Cyprus Airways came on the eve of a cabinet meeting to decide the future of the ailing state-owned the national carrier, triggered by a debacle over staff cuts which grounded the airline last week.

"We had two meetings with Mr. Loizides today and he decided tonight to hand in his resignation," said Transport Minister Haris Thrasou.

Thrasou said Loizides had told him the news by phone but was expected to send the minister a letter by fax later in the evening that would set out the reasons for his resignation.

Loizides was the third member of the airline's board to quit in a week, including Vice Chairman Achilleas Kyprianou.

The resignations all followed the strike that ensued after the company dismissed 22 senior cabin crew members. Management rescinded its decision hours later amid scathing criticism from the government that the airline had not followed correct dismissal procedures.

Kyprianou's letter of resignation came amid media reports that some board members were uneasy with the tactics of Loizides, who had spearheaded a plan to cut costs. The airline recorded losses in 2004 of CYP36.9 million pounds (USD$84 million) in 2004, hit by fleet renewal costs and mounting competition.

It dismissed a third of its senior management last year and said more would follow. Cost-cutting would also involve spinoffs of catering and baggage handling divisions and the disposal of its Greek subsidiary, Hellas Jet.

Thrasou said on Wednesday that the government had two investors interested in Hellas Jet and that a decision would be made concerning the loss-making subsidiary "in the coming days."