ECONOMY

Cyprus Airways may downsize

NICOSIA (Reuters) – Redundancies, an overhaul of flight schedules and fleet cuts are on the cards at Cyprus Airways, the chairman of the struggling airline said yesterday. Stiffer competition and steep repayments for a new fleet knocked a sizable dent in the carrier’s finances, which made a 20.9-million-pound net loss in 2003. But Chairman Constantinos Loizides told Reuters that, at present, the airline saw no need for a profit warning this year. «We announced a strategic plan in February… We have made many changes (in the meantime) which affect productivity and save money for the airline, but the major changes are coming up now,» Loizides said. Loizides said he expected the group to announce a reduction in its capacity levels when directors meet in a two-day brainstorming session next week to assess the results of a survey into its fleet requirements by external consultants. «We will proceed with a decision on the fleet that we need as an airline. We planned it in such a manner to implement the decisions at the beginning of the winter season, which starts at the end of October,» he said. Cyprus Airways has a fleet of 19 aircraft, and consultants’ reports have shown that some of them are underutilized, Loizides said. «It is evident we have more capacity than the market can handle right now.» A decision to reduce the fleet would have a knock-on effect on personnel levels. The airline now has a highly unionized staff of around 2,000. Asked if the airline knew what staff cuts were likely, Loizides said: «Yes, we have a figure in mind. I don’t think it is fair to discuss it. I would say that in proportion to the work force it is not a very high number, but in absolute terms one person is a big number.» Loizides said the overhaul at Cyprus Airways included putting all its activities under the microscope to ensure the airline no longer had an outflow of cash to subsidiaries. No division will escape the review, including Hellas Jet, the Greece-based subsidiary created in 2003 to tap an anticipated increase in passenger traffic ahead of the Summer Olympics in Athens this August.