Losses at the troubled Cyprus Airways Group reached CYP 6.82 mln (EUR 11,66 mln) in the first six months of this year, compared to a significantly higher loss of CYP 23.32 mln (EUR 39,87 mln) in the corresponding period of 2006.
Total Group revenue, excluding Eurocypria’s revenue (CYP 21,1 mln) from the comparative figures of 2006, improved by CYP 8,1 mln or 12,3% to CYP 73,8 mln (EUR 126,2 mln) in the first six months.
According to the consolidated results approved by the board, the state-controlled Group’s operating expenditure, which includes cost of sales and administration expenses, was CYP 79,3 mln in the first six months of this year and appears lower because the 2006 comparative numbers included the operating expenditure of CYP 22,2 mln of Eurocypria Airlines that was spun-off and sold to the government in November 2006.
Excluding these expenses, the Group’s operating expenditure increased by CYP 400,000 as a result of the rise in ad-hoc aircraft rental charges by CYP 1,6 mln, the costs associated with the utilisation of an additional A320 aircraft, which was wet leased to Eurocypria last year, mitigated by a small drop in costs due to the Restructuring Plan.
Redundancy compensation totalled a mere CYP 200,000 in 2007, compared to CYP 10,2 mln in 2006.
As for the prospects for the second half of 2007, the company said the results of the second half of each year, which incorporate the peak summer holiday months in respect of passenger traffic, are under normal circumstances markedly improved in comparison to those of the first half.
In order to safeguard its cash-flow and liquidity position Cyprus Airways entered into a long-term government guaranteed loan of EUR 78 mln in May, after approval from the European Commission. Part of the proceeds from this loan was used to repay in full the rescue aid loan of EUR 51 mln.
The company’s share capital is expected increase before the end of the current year by CYP 14 mln (€24 mln) through a rights issue to existing shareholders which will further improve the company’s liquidity.
The Group is also in advanced negotiations to set up of a joint venture that will undertake the company’s passenger and ramp handling Larnaca and Paphos airports, following the liberalisation of these services that will lead to substantial savings for the Group.
The prospect of setting up a joint venture to undertake its catering operations at Larnaca airport is also being considered.
