Cyprus Airways signed a loan agreement in Nicosia on Tuesday with Hellenic Bank for 78 million euros (about 106 million U.S. dollars) to help the airline pay off previous loans and improve its finances.

Around 51 million euros (68 million U.S. dollars) of the ten-year loan will go to repaying an earlier short-term loan and the remainder to implementing the airline's restructuring plan, the Cyprus News Agency reported.

The ailing flag-carrier posted a net loss of 4.3 million Cyprus pounds (about 10 million U.S. dollars) in 2006, although the situation has improved since 2005, when net losses were 22.6 million Cyprus pounds (about 52.6 million U.S. dollars).

A recent report by the Association of European Airlines (AEA) showed constant delays in Cyprus Airways flights in the last quarter of 2006.

Cyprus Finance Minister Michalis Sarris described the loan agreement as "the beginning of a long effort to improve the economic results of the airline".

The minister said the European Union demands to be kept continuously informed about the progress of the airline's restructuring plan and called on its staff to do their best for a better performance.

Source: Xinhua