Cyprus Airways is considering a partial renewal of its fleet with more energy-efficient aircraft to cut down on a growing fuel bill, it said on Wednesday.
The national carrier underwent a costly part renewal in 2002 and 2003, blamed by detractors at the time for pushing the carrier into financial difficulties.
"We are looking at the possibility of a part renewal of our aircraft in some depth. We expect to have a partly renewed fleet by the next summer season," chairman Kikis Lazarides told a news conference.
Cyprus Airways is state-controlled, with the government holding a 69 percent stake. It has a fleet of 11 aircraft, all Airbus, with an average age of 12.5 years.
"It is well known that some of our aircraft are somewhat tired and need to be renewed... the older the plane, the more fuel they require and the increase in the cost of fuel is an additional incentive pushing us towards this option," Lazarides said prior to the group's annual shareholders' meeting in Nicosia.
A spate of airline bankruptcies meant that there was also more availability of aircraft on the market, he said.
The airline posted a net profit of EUR1.2 million euros in 2007, swinging from a EUR7.4 million loss in 2006.
It made a fifth of its workforce redundant in 2006 under a European Union-sanctioned restructuring program, with those left forced to take pay cuts.
Part of its financial difficulties were widely attributed to the timing of a part-renewal of its fleet five years ago, ordered under a different management. Lazarides said different acquisition and financing options were being discussed.
"This company is now financially viable," he said.
Lazarides said the airline had anticipated good results for 2008, but were forced to reconsider their initial forecast on the back of climbing fuel costs.
"I do not think we can reach the targets we had set for the year, which were quite favorable over 2007," he said.
The airline spent EUR68 million last year in fuel. Initial projections of an EUR82 million bill in 2008 have now been revised to cost the airline EUR106 million, he said.
