I believe technically AZ can do all of the following: (a) re-fare your tix to a one-way YYZ-MXP full business fare, (b) not pay Cyprus Air for the MXP-LCA-MXP portions as CY did not lift these flight coupons and thus won't be paid, and at the same time (c) re-sell the MXP-YYZ portion when you "no show" on the MXP-LCA portion as all subsequent booking under the same itinerary will be canceled.
I doubt that (a) will happen, but I think (b) and (c) are a given if you don't show up (whether you cancel or not is irrelevant).
Originally Posted by LapLap
Without knowing the details of how things work internally, I hoped that cancelling the unused portions would potentially save AZ some money. They can cancel the business flights with Cyprus Air and sell the flight from MXP to YYZ to someone else should they need to.
Wishful thinking perhaps...