National carrier Cyprus Airways swung to a net loss of EUR 3.28 mln in 2009, with operations crimped by a fall in passenger and cargo traffic, it said.
The airline, majority controlled by the state, posted a EUR 1.74 mln net profit in 2008. Revenue fell 20% last year on the back of a decline in passenger numbers and fare yields, and a fall in cargo business. The airline's operational costs were 16.7% lower, pulled down by a steep decline in the cost of fuel.
CAIR said it could not give guidance for 2010 because of uncertainty surrounding the duration of the global economic downturn and the effect it would have on the aviation industry.
"The group has adequate liquidity to meet any commitments which may arise, without the need to resort to short-term banking facilities," the airline said.
However, it is doubling flights to Beirut in summer, will be adding two more to Tel Aviv and raising the Brussels schedule from two to five weekly from November. Moscow flights will increase by one and new routes will be added to the network to include Dublin and Kiev.
Airline bosses are confident they can maintain their present 45% market share on the Athens route, despite the recent merger announcement from Aegean and renewed Olympic Air.
Doubles flights to Beirut
CAIR chairman Kikis Lazarides said the airline would double its daily flights to Beirut from June to September, but kept its pricing unchanged, making the 20-minute journey to the neighbouring country the most expensive. A return fare to the Lebanese capital costs EUR 190 per person for a 20-minute flight compared to EUR 50 on the heavily competitive Athens route, which takes one-and-half hours.
However, a senior marketing executive told a press briefing that the fare on the additional flights would be lower, but could not elaborate.
Cyprus Airways shares a bilateral air traffic agreement with Middle East Airlines, but competition from newcomer Aljazeera on the same route could eventually help reduce the air fare on this route. By operating turnaround flights, CAIR would also reduce costs as its crew has to stay overnight in Beirut for the return flight the following morning.
During the past three years, the number of passengers who chose to fly Cyprus Airways to and from Beirut has recorded a significant increase, despite the world economic crisis.
In 2007, CAIR carried 48,000 passengers to and from Beirut, 56,000 in 2008 and in 2009 a total of 65,000 passengers.
Cutbacks and savings
Lazarides said that the Swissport cooperation at Larnaca airport earned the airline some 2-2.5 mln euros in savings and reduced its workforce by 137. Also, CAIR would continue with its freeze on new hirings and would recruit personnel only to replace retirements.
The airline is also reducing its overseas costs by closing down several offices and handing over the business to general sales agents (GSAs). The Brussels office has been closed and the Athens team of 28 staff will be reduced to 20, helping to save some 304 mln euros more.
Efficiencies will also be achieved through the introduction of newer aircraft, as part of the plan to revitalise the fleet and lower its average age from the present 18-20 years, Lazarides said. He added that a new Airbus A319 was delivered in November 2008, two A320s in February this year and another A320 in May, with an option on another three A320s between November and February 2011.
However, Lazarides said that “looking ahead to the next five years, we are open to reviewing all types of aircraft.”
Cyprus Airways has in recent years dismissed all its Boeings and maintained an Airbus-only fleet.
The chairman also said that in 2009 the airline sold 150,000 tickets online, nearly a quarter of all its direct sales, and added that bar coded ticketing should be available by the end of 2010.
Easyjet, Jet2 launch new flights
Meanwhile, Jet2 and Easyjet, are both launching additional flights to Paphos in summer. Easyjet will kick off the first set of new routes from April 14 and will fly from Edinburgh twice per week and fly from Bristol four times per week. A selection of other flights already exists from Stansted, Gatwick and Manchester airports.
Jet2 will fly out to Paphos once a week from both Newcastle and East Midlands airports from the beginning of May.
The news of the new flights was announced by the Cyprus Tourism Organisation when Chairman Alecos Orountiotis was in the UK as part of a promotional campaign for the island. The aim is to keep the number of visitors to the island at the same level as last year or even try and increase the total.
