By Jean Christou
CYPRUS Airways yesterday announced a group pre-tax profit of £10 million compared to losses in 1997 of £3.2 million.
The turnaround in the troubled group’s fortunes was because of increased revenue and passenger figures, and savings of some £2 million, CY chairman Takis Kyriakides told journalists.
He said the group’s total revenue rose to £146.2 million in 1998 from £135.2 million, an 8.1 per cent increase surpassing all expectations under the strategic plan up to the year 2000.
The group comprises Cyprus Airways, charter firm Eurocypria, the duty free shops and tour operator Cyprair.
CY recorded pre-tax profits of £5.3 million in 1998, compared to a loss of £3.1 million in 1997.
After two years of losses around the million mark, Eurocypria last year recorded a profit of £2.2 million, 17.5 per cent of which will go to its employees as a “thank you gift”, Kyriakides said.
Duty Free Shops Ltd recorded profits of £2.5 million in 1998 compared to £800,000 in 1997. Kyriakides said the shops had shown an impressive 39.3 per cent increase in sales.
Cyprair also showed a small profit of £66,000, up from 1997’s £48,000.
Kyriakides said passenger figures for the two airlines had also increased by 4.5 per cent, bringing the total number in 1998 to 1.35 million. The airline maintained its 35 per cent share in the air transport market to the island.
“This means that one in every three passengers who flies to and from Cyprus uses either Cyprus Airways or Eurocypria,” Kyriakides said.
The three most profitable routes for the airline were Athens, London Heathrow and Tel Aviv, Kyriakides said, bringing in some £9 million in revenue, which he said went to subsidise some of the less profitable routes.
The CY chairman put the year’s overall results down to a combination of other factors as well as revenue and passenger increases.
He said external factors included a favourable international financial environment, low fuel costs and improvements in the exchange rate against sterling.
Kyriakides also said there had been some success in reducing costs by cutting back on staff in overseas offices, reducing vacancies within the company and cutting loss-making routes.
“The result of this was a saving over the year of around £2 million,” he said.
Kyriakides said that although the forecast for 1999 was also promising, the group’s running costs continued to be an issue of concern, reaching £133.6 million in 1998 – an increase of £2.6 million, despite the cost of fuel being lower by £3.3 million during the year.
Kyriakides warned that by 2002, competition would reach “threatening levels”.
“We are still at the start of the road and we have a long way to go and a huge job to complete before we achieve full recovery,” he said.
