ECONOMY

In Brief

Aegean Airlines expects to end this year in the red Aegean Airlines, Greece’s largest carrier, posted an 8.4-million-euro loss in the first nine months of the year, hurt by the economic crisis at home. Aegean, which agreed in February to team up with former state carrier Olympic Air to cut costs, said yesterday domestic passenger volume had dropped by an annual 15 percent to 2.5 million flights, as Greeks cut travel spending. «Our financial performance continues to be adversely affected by the severe recession of the Greek economy,» Dimitris Gerogiannis, the company’s managing director, said in a statement, adding that Greek consumers had become more «price-sensitive.» Aegean’s results were also burdened by a 6.6-million-euro tax charge imposed by Greece’s cash-strapped government on big business. Full-year results will also be in the red, Gerogiannis warned. «The fourth and seasonally weak quarter is expected to be loss-making, leading with certainty to a substantially negative result for the year as a whole,» he said in the statement. (Reuters) Romania sells 1-yr T-bills, average yield 7.22 pct BUCHAREST (Reuters) – Romania sold 1 billion lei ($320 million) in one-year treasury bills as planned yesterday, with average yields rising to 7.22 percent in the clearest sign yet the government has abandoned an unproductive yield cap strategy. Buyers of Romanian debt have been demanding higher returns since May, driven by uncertainty over austerity measures backed by the International Monetary Fund being pursued by a fragile government and a worsening inflation outlook, but the Finance Ministry resisted paying more than 7 percent for several months. That stance led to smaller auctions and some failed tenders, setting the country up for a likely funding crunch, but a ministry official signaled last week it was ready to ditch the strategy and build a yield curve. «The yield cap strategy is over,» said Nicolaie Alexandru-Chidesciuc, chief economist at ING Bank in Bucharest, after yesterday’s auction. In late October, debt managers sold five-year paper at the ministry’s self-imposed yield cap, but such paper is now trading at above 7.3 percent on the secondary market. On November 8, the ministry sold one-year paper at an average yield of 7.07 percent and three-year treasury bonds at 7.1 percent. «The ministry has already signaled it was ready to give up capping yields… possibly, we are now witnessing a normal yield curve as they adapt their strategy to market realities,» said Ionut Dumitru, chief economist at Raiffeisen Bank in Bucharest. Moody’s on Turkey Ratings agency Moody’s yesterday raised its outlook for the Turkish banking system to «stable» from «stable to negative,» citing lenders’ improved capital and liquidity position, improving asset quality and continued economic recovery in Turkey. Banks still had moderate market penetration in the country, which has favorable demographics and social mobility potential, Moody’s said. But it warned the risks of overleveraging consumers and asset bubbles would increase in the medium to longer term if the pace of credit growth exceeds the real demand of the growing economy. (Reuters) Ankara deficit Turkey’s budget deficit fell 24 percent from a year earlier to 1.8 billion lira ($1.25 billion) in October, Finance Ministry data showed yesterday. The primary surplus, which excludes interest payments, was 351 million lira in October, down 85 percent from a primary surplus of 2.31 billion lira a year earlier. (Reuters) Turk bank repo The Central Bank of the Republic of Turkey injected 3 billion lira ($2.08 billion) into the market in a one-week repo auction yesterday at a fixed simple rate of 7 percent. Total bids were 13.65 billion lira. The repo will mature next Monday, central bank data showed. (Reuters) Croatian jobless Croatia’s unemployment rate rose to 17.8 percent in October from 16.9 percent in September, the Central Bureau of Statistics said yesterday. (Reuters)