14:40 CYPRUS Airways (CY) passenger numbers fell 15 per cent between January and October this year compared to the same period in 2010 due to increased competition and the economic crisis, the national carrier said.
In a statement to the Cyprus Stock Exchange, CY said: ”The number of passengers carried… were lower by approximately 210,000, or 15 per cent, from last year and the passenger load factor rose to 73.1 per cent in comparison to 71.6 per cent in the respective period of last year.”
The statement added that in order to cushion against a forecast decline in demand, CY added: “The Company reduced the available seats in the market by 336,000 or 17 per cent for the period January-October 2011 as compared to the same period of last year,”
Aside from the crisis and strong competition from rival airlines, CY said the sporadic Greek air traffic controllers’ strikes had a significant impact their costs, since the ban on entry into Turkish airspace means CY planes can only reach Europe through Greek airspace.
The news is not all bad, however. The imminent sale of a spare aircraft engine(V2500-A5), together with the prior sale of a spare Trent 700 engine, is expected to bring cash inflow to around USD $15 million. According to the Cyprus News Agency, the profit on this amount to €7.5 million.
In September, CY agreed to lease two A321-200 aircraft for six years from ILFC, due to be delivered in April and June 2012 respectively, while the lease expiration dates of the two other aircraft were brought forward to December 2011 and January 2012, about one year earlier than the lease expiry dates.
According to the statement: ”The early redelivery of the A330 aircraft is expected to bring about significant improvements to the operating results of the company.”
Furthermore, ”the negotiations for the renewal of the collective agreement have commenced, in which the company will seek to remove existing distortions in its mode of operation, so that it is further rationalised and savings in labour costs are brought about.”
CY expects additional financial benefits to flow with the full implementation of the agreement for the exchange of slots at Heathrow airport with Virgin Atlantic, which provides for more convenient departure and arrival flight times from Larnaca to London Heathrow and vice-versa. The agreement came into effect at the end of last month.
Further information on the developments will be presented with the announcement of the company’s indication of results for the year 2011 by the end of February 2012.
