ECONOMY

Airline may limit purchases

NICOSIA (Reuters) – Cyprus Airways may renegotiate acquisition terms of its new Airbus and Boeing fleet if it is affected by a global aviation crisis, the airline said yesterday. The flag carrier is due to take delivery of two Airbus A319-200s in the spring of next year, heralding a two-year overhaul of its aging fleet. In addition to the outright purchase of the two Airbus planes, it plans to lease two wide-bodied A330-200s and four Boeing 737-800s between 2002 and 2003. Right now we are not affected, but we are keeping a close watch on the situation to determine whether to renegotiate terms or delay their arrival, said airline spokesman Tasos Angelis. The measure is included in a 10-point contingency plan the airline may invoke if it is seriously affected by the global slowdown in travel. Now an Airbus carrier, Cyprus Airways had planned to raise cash for the new fleet by selling its existing four A310s for between $45-50 million and tapping the $37 million it raised in a cash call on the Cyprus stock market last year. The airline is apparently being buffered from a serious decline in air transport because of its relative lack of exposure to the American market. However, it is heavily reliant on the fickle tourism sector, which has seen new bookings stall since the attacks on the USA on September 11. Angelis said the airline had pre-emptively tried to streamline expenses by imposing a freeze on the recruitment of new contract staff and on non-essential capital expenditure. Twelve seasonal staff with charter subsidiary Eurocypria had their contracts terminated two weeks earlier than expected after some cancellations. The charter carrier employs some 100 contract staff, Angelis said. The Boeing 737-800s Cyprus Airways plans to lease in 2003 are to be used for Eurocypria. Last month Cyprus Airways effectively pulled out of the bidding race for ailing Greek carrier Olympic Airways.