A story by global media company Bloomberg released on Monday, in which it claimed a Cypriot airline was in danger of collapse due to higher fuel and labour costs, has caused concern, prompting the chief executive officers of Cyprus Airways and Tus Airways to respond.

Bloomberg, citing analysts at brokerage firm Sanford C. Bernstein, said that “Europe’s weaker airlines face a heightened risk of collapse this winter as nations that rescued carriers during the Covid crisis focus support elsewhere amid rising inflation”.

It added that carriers across Europe are being pressured by soaring fuel prices and higher labour costs, as well as the expected drop in travel demand during the winter period.

Moreover, the publication said that smaller carriers in Central and Eastern Europe will face the highest risk of failure, particularly when taking into account levels of competition and capacity, their route networks, as well as probable costs from leasing and replacing their aircraft.

“The most exposed carriers include one from Cyprus and two from Albania, as well as airlines based in Belarus, Bulgaria, the Czech Republic, Georgia, Moldova and Romania,” Bloomberg said.

Speaking to Cypriot outlet Economy Today, Tus Airways CEO Ahmed Aly said that “from its inception in 2015, the airline has grown and is now the country’s largest airline, contributing to Cyprus’ economy, its tourism industry, as well as its employment market and investment sector”.

Aly also said that in 2022, the company more than doubled its Airbus A320 fleet to five modern aircraft, while at the same time operating a service network in the Mediterranean region and the Middle East.

“Despite the situation in which the market has found itself, with the financial challenges it now poses, the company’s effective business plan and its share structure have made it particularly strong and with the prospect of further strengthening its footprint, in 2023 and beyond,” Aly concluded.

Meanwhile, Cyprus Airways CEO Paul Sies stated that the airline experienced a very positive summer season.

“On the one hand, there was a fixed lease operating for other airlines and on the other dynamic scheduled operations with strong revenue growth,” Sies said.

“This winter an aircraft is being re-delivered which will operate on a wet lease basis with guaranteed revenue and another aircraft which will cover the company’s network,” he added.

Sies explained that this ensures that Cyprus Airways has the minimum possible risk in its winter operations, especially since it has adopted a lean organisational structure which allows it to make seasonal adjustments.

“The company’s shareholders have complete confidence in our strategy and agree with its operations, as they have always done, as we grow in the future,” Sies said.

“From March 2023, two more A320s will be added to our fleet so that we are ready for another strong summer,” the Cyprus Airways CEO concluded.