ECONOMY

In Brief

Olympic Airlines may cut international flights Olympic Airlines, Greece’s national carrier, said the rising cost of fuel was scuttling attempts by the state-controlled company to overhaul operations and that it may cut loss-making international flights. Before fuel costs, the company’s first-quarter loss narrowed by 7.1 million euros ($11 million), the Athens-based carrier said in an e-mailed statement yesterday. That contraction was more than offset by fuel costs, which increased by 12.8 million euros in the period. The company didn’t provide any further details. Revenue was little changed at 142.7 million euros compared with 143.1 million euros a year earlier, helped by increased passenger numbers, according to the statement. The company will attempt to reduce costs by cutting back on loss-making routes, and by reviewing routes and the frequency of flights, it said. (Bloomberg) Greece to raise $1.5 bln from 5-year bond Greece will raise $1.5 billion from a five-year dollar-denominated benchmark bond it is issuing, the head of the country’s debt management agency (PDMA) told Reuters yesterday. «We will raise $1.5 billion,» said PDMA chief Spyros Papanicolaou. Guidance has been set at mid-swaps plus 10 basis points. Deutsche Bank, HSBC, Lehman Brothers, Morgan Stanley and National Bank of Greece are managing the sale. Greece is rated A1 by Moody’s Investors Service and A by both Standard & Poor’s and Fitch Ratings. (Reuters) Power plant Enel SpA, Italy’s largest utility, and Germany’s E.ON AG agreed to join state-run Romanian power producer Termoelectrica SA to build an 800-megawatt, coal-fired power plant in the Eastern European country. The plant will be built in the Romanian city of Braila and make use of infrastructure at an existing generation facility, Enel said yesterday in a statement distributed by the Italian stock exchange. The companies will create a joint venture to complete the project with Enel and E.ON paying cash for their shares of the venture and Termoelectrica contributing assets at the existing generator in Braila, Enel said. (Bloomberg) Inflation targets Turkey’s central bank governor said yesterday the bank should not change its inflation targets again, after coming under criticism for loosening them for the coming years amid rising global food and oil prices. Earlier this month the bank almost doubled its inflation target for next year to 7.5 percent from 4 percent and also set new targets for the following two years. The bank has failed over the past two years to meet its 4 percent target. «The central bank should change the inflation target only once, not twice or three times,» Governor Durmus Yilmaz told a conference in Istanbul. «It is incumbent upon us once we revised the targets, we don’t have the luxury not to achieve them.» The comments helped push the lira up to 1.2200 against the dollar on the interbank market, brokers said. The central bank faced criticism for raising the targets after May inflation came in at an annual 10.74 percent – back in double digits for the first time in more than a year. (Reuters)