Cyprus Airways issued (01-Jul-2010) a profit warning for 1H2010, with losses expected to be “significantly” more than 1H2009. The carrier attributed the deterioration to the tough economic climate, increasing competition, lower yields, increasing price of fuel and the effects of the volcanic ash cloud, which led to the closure of a large part of Northern Europe's airspace during Apr-2010. [more]
Cyprus Airways issues profit warning for 1H2010
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Both Finnair and TAP are based in peripheral corners of Europe: Finnair in the extreme northeast and TAP in the southwest. Both are based in countries with relatively small populations, but they have developed networks that capitalise on their geographic location to carry connecting traffic from across Europe and elsewhere to long haul destinations in other continents.
TAP's main long haul market is Upper South America (primarily Brazil), but it also has a secondary long haul niche in Africa. Finnair's main long haul market is Northeast Asia, with an additional presence in South and Southeast Asia. Both also operate to the US. On short haul, LCC competition has been a bigger threat to TAP than to Finnair, but cost savings are important to both.
TAP and Finnair have similar traffic volumes, unit costs and average trip lengths. Moreover, both have struggled to generate sustainable profitability. This report compares and contrasts Europe's two leading independent exponents of the location based long haul niche strategy. Both are set to accelerate their long haul growth.