Cyprus Airways has signed an agreement for an early lease termination on its two Airbus A330-200s, taking the struggling carrier out of the long-haul market.
The airline announced plans earlier this year to sub-lease one of its two A330s in an attempt to stem its losses. In its half-year results, it revealed that both of its A330s were subsequently sub-leased to the UK Ministry of Defence.
The MoD is to return both aircraft to Cyprus Airways in November, and the carrier has agreed to terminate the leases on the aircraft in December 2011 and January 2012. This brings forward the lease expiry date by one year. The aircraft are leased from International Lease Finance (ILFC), according to Flightglobal's Ascend database.
Cyprus Airways saw its first-half losses widen to €29.3 million ($41.9 million) from the €25.5 million loss posted in the same period last year. Operating loss widened to €29.9 million from €26.1 million, and revenue fell 8% to €90.6 million.
Passenger numbers in the first six months of 2011 dropped 14.1% and "in order to cushion the impact", the carrier cut capacity by 18.7%. This resulted in its load factor rising to 67.3% from 65%.
Cyprus Airways said the early A330 lease termination, together with its flight programme "being reviewed on a continuous basis", will result in a significant improvement in its second-half figures.
However, it added that it has "no or limited ability to influence" the impact of the financial crisis on its markets, which could "adversely affect the effort to secure the long-term viability of the group".
Cyprus Airways pointed out that it has "sufficient liquidity to meet its current obligations as they fall due without being dependent on short-term banking facilities".