Cyrpus Airways formulates action plan to secure long-term viability

Cyrpus Airways stated (29-Feb-2012) it is formulating an action plan in order to make the company competitive and to secure its long-term viability. "Implementation of the measures of the Action Plan will lead to a drastic reduction in the operating losses for the current year in comparison to 2011 and it will have a favourable impact on the long term viability of the Company," the carrier said. The main pillars of the plan are as follows:

• Share capital increase to improve the company's capital base. The carrier has announced a EUR45 million capital raising and said it would reduce its fleet and staff levels amid increased competition, weakened passenger traffic and pressured profitability (Reuters, 29-Feb-2012). The carrier plans to sell 500.7 million new shares to existing investors, with a nominal value of EUR0.09/share, with the shares worth an estimated EUR45.06 million (the share price closed at EUR0.05 on the stock exchange on 28-Feb-2012);
• Curtailment of operating costs;
• Reduction in labour cost and removal from the collective agreement;
• Disposal of aircraft and respective decrease in staff numbers as well as further streamlining of the operating schedule. As part of this, the airline plans to sell two A319s, reducing its fleet to 11 aircraft;
• Introduction of measures to increase the company's revenues.

The carrier, which is 69% state-owned, also noted efforts for identifying a strategic investor will continue.