AILING Cyprus Airways (CY) expects better performance in the second half of 2010 following the €25 million loss posted in June, though overall results for the year will not improve significantly, a company extraordinary general meeting heard yesterday.
“The adverse international economic conditions and the intensifying competition between airlines in their effort to win a share of the passenger pie lead to the frequent appearance of panic moves which manifest through lower than cost charges,” acting CY chairman Christos Patsalides said.
CY posted a €25.1 million loss before tax in the first half of the year, compared to €3.8 million in the respective 2009 period.
“Although the second half of 2010 is expected to be much better as regards performance, the facts for the whole year are not expected to be significantly different,” Patsalides said.
He said the company’s results were negatively affected due to the eruption of the volcano in Iceland in April, which forced the closure of a large area of North Europe’s airspace.
“The company had to cancel 100 flights carrying 16,000 passengers and 200 tonnes of cargo,” Patsalides said.
Oil price hikes also played a role with the airline paying €6.5 million extra compared to 2009.
CY revenues for the first half of this year recorded a €17 million drop – 14.6 per cent – to €99.3 million compared to €116.3 million last year – mainly due to the decrease in passenger numbers.
On average, CY has been carrying around 1.6 million passengers per year in recent years, corresponding to 24 per cent of the total traffic to and from Cyprus.
The government has decided to merge CY and Cyprus’ other ailing airline, Eurocypria (ECA) in a bid to save them both from going under.
Patsalides said CY can take over the operations of ECA under the conditions agreed by the two sides and the government.
“We are certain that this will be resolved, bolstering the potential, survival prospects and growth of CY,” Patsalides said.
Meanwhile, ECA pilots will on Friday meet Finance Minister Charilaos Stavrakis to discuss their future.
The pilots want assurances that ECA staff will be transferred to the new formation and there would be no job losses.
The pilots have warned they would strike if the government does not secure their jobs ahead of the controlled closure of ECA, which they expect to take place by the end of November.
