Cyprus Airways losses more than double in 2012
NICOSIA – Agence France-Presse
Hürriyet PhotoStruggling Cyprus Airways on Monday posted a loss of 55.8 million euros after tax for 2012, more than double the net loss of 23.88 million of the previous year.
The national carrier said the increase in losses is mainly attributed to the reduction in revenue from cargo and passenger traffic, as unprofitable routes were axed.
Total revenue dipped 17.6 percent to 175.5 million euros in 2012 from 212.9 million in 2011.
Operating losses for 2012 almost doubled to 49.7m euros from 25.5m in 2011.
The state-run airline said its future survival depended on it receiving rescue aid through a government share capital injection which needs European Union approval.
"These indicative results do not include any provisions which will become necessary if the expected funding is not received," said Cyprus Airways. "This uncertainty has to be taken into consideration in the analysis of the indicative results," it added.
Cyprus Airways said it is in the process of implementing a Turnaround Plan - formulated by Air France Consulting - which seeks to cut staff, reduce salaries, outsource services, increase productivity and expand into Greece.
The company hopes to reduce its 1,000-strong workforce by around 400.
It said the recession at home and the island's need for an EU bailout, involving a troika of international lenders, darkens the immediate horizon.
Nicosia is estimated to need 17.5 million euros in financial aid to keep its Greek-exposed banking system and crisis-hit economy afloat.
"The current year continues to be affected by the economic downturn and the intensifying competition in the main markets where the company operates," said the airline. "In Greek Cyprus, the financial crisis is expected to deepen following the implementation of painful austerity measures that will be finalised with the troika," it added.
There was a total decrease of 16.7 percent in operating expenditure, which includes cost of sales and administration expenses, to 224.9 million euros from 270.1 million in 2011.
Regarding future prospects, the airline said that it is operating in a highly competitive and constantly changing environment and its future performance is "subject to a variety of factors some of which are beyond its control".
This includes fuel costs and cut-price competition fighting for popular destinations to Greece and Britain.