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Financial Troubles at Cyprus Airways

Olga Kandinskaia
May 1, 2017
SKU:
BUS-004761
Region: 
Europe
Topic: 
Accounting & Finance, Strategy & General Management
Length: 
12 pages
Keywords: 
fianance, trading performance, trading, performance, rescue aide
Student Price: 
$4.00 (€3.45)
Average rating: 
0

Cyprus Airways was the national carrier of the Republic of Cyprus. Established in 1947 and predominantly state-owned, the airline became known for being poorly managed and consistently losing money. The latest public money injection took place in December 2012 - January 2013, and amounted to €103 million of state funds – prompting soon afterwards an in-depth investigation by the European Commission. The Commission was not sure if the capital increase was made on market terms. Indeed, if the company faced severe financial problems and its viability was at stake, it would explain why the majority of private shareholders decided not to participate in the capital increase. Cyprus Airways published its latest audited financial results in 2011, and released some unaudited results for 2012. What was the airline’s financial situation, as revealed in those reports? What specific financial problems can be identified via the company’s financial statements? How did the airline’s situation look to a potential investor?

Learning Outcomes: 
  1. Demonstrate thorough knowledge and full comprehension of the information contained in the three annual financial statements such as Income Statement, Balance Sheet and Cash Flow Statement (Questions 1-3) (Bloom’s Taxonomy learning outcome levels 1 and 2)
  2. Interpret and use the information from the financial statements to calculate relevant ratios, and apply acquired knowledge and facts to compare the situation of the company to the key competitors (Questions 1-3) (Bloom’s Taxonomy learning outcome levels 3 and 4)
  3. Perform an analysis of the situation to examine the company’s financial strengths and weaknesses and critically evaluate its financial situation (Question 4) (Bloom’s Taxonomy learning outcome levels 4 and 5)
  4. Appraise the company from an investor’s point of view by performing SWOT analysis (Question 5) (Bloom’s Taxonomy learning outcome level 6)