Cyprus Airways suffers heavy loss in first half of 2006

Cyprus national carrier, Cyprus Airways, posted a loss of 23.32 million Cyprus pounds (51.3 million U.S. dollars) in the first half of this year, compared to a loss of 20.4 million pounds (44.88 million dollars) in the same period of last year, local media reported on Friday.

The airways was quoted as saying in a statement that the main reason for the loss was an increase in expenses for redundancy compensation of 10.2 million pounds (22.44 million dollars) this year, compared to 2.9 million pounds (6.38 million dollars) for 2005, paid or to be paid to staff which has left or will quit the company before the end of the year as part of a restructuring plan.

However, according to consolidated results of the 2006 first- half announced by the airways, the total revenue reached 86.8 million pounds (190.96 million dollars) in comparison to 84.9 million pounds (186.78 million dollars) in the same period of last year, an increase of 2.2 percent due to an increase in passenger revenues.

The airways said that results of the second half of each year, which incorporates peak months in passenger traffic, are under normal circumstances markedly improved in comparison to those of the first half.

However, an intense competition, a rise in the cost of fuel and unstable situation in the Middle East make any predictions for the second half of this year difficult, the airways said.

The airways has been under a controversial restructuring plan to regain competitiveness, including measures such as fleet reduction, staff cuts and outsourcing.

Source: Xinhua