Cyprus Airways Expects 2011 Loss

February 24, 2012

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Cypriot flag carrier Cyprus Airways said on Friday full-year results would be a "significant departure" from 2010 after being hit by intensified competition and rising fuel costs.

The board will meet on February 28 to discuss full-year results and capitalisation issues.

Cyprus Airways, which made a net profit of EUR€215,000 (USD$286,000) in 2010, posted a loss of EUR€29.3 million for the first half of 2011.

The government, which owns 70 percent of the airline, has said it wanted a strategic investor who could potentially assume a majority stake in the company.

Cyprus Airways said 2011 results would reflect stiffening competition in its major markets and higher fuel costs. It would also feature a non-recurring expense from a redundancy scheme, and one-offs in income including a slot exchange at London Heathrow and profit from the sale of a plane and three engines.

Past attempts to prop the ailing carrier have included overhauls and staff cutbacks.

Although the state is prohibited by EU regulations from directly subsidising the airline, it received a cash injection when the government spun-off a charter subsidiary which ultimately folded. In 2010, it received compensation for a flight travel ban over Turkish airspace.

(Reuters)