* Second half to be better than first half
* Focus on cutting costs - spokesman
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NICOSIA, Nov 11 (Reuters) - Loss-making flag carrier Cyprus Airways requires urgent action to protect its future even though the second half was set to be substantially better than a loss-making first half.
"Despite the important work undertaken to increase competitiveness, the board of directors believes further drastic measures are immediately required to safeguard the viability of the airline," it said on Thursday.
"We have to adopt policies in all areas to reduce our costs and increase revenues. That is the general approach," a spokesman for the majority state-controlled airline spokesman told Reuters.
On Tuesday, finance minister Charilaos Stavrakis said Cyrpus Airways was set for a 30 million euro ($41 million) loss this year and its viability was a cause for concern.
In August, the airline posted a first-half loss of 25.1 million euros, hit by disruption from the volcanic ash cloud and Greece's financial crisis.
Cyprus Airways has suffered from cheaper private operators nipping at its heels, particularly low-cost operators like easyJet and Monarch on previously lucrative British routes.
It underwent extensive restructuring in 2006 and 2007, when it shed a fifth of its workforce and staff took pay cuts. It recently reduced staff numbers in Paris and Athens, and outsourced services in Amsterdam, Brussels and Zurich.
Stavrakis referred to Cyprus Airways on Tuesday during a discussion about Eurocypria, the state-controlled charter airline which recently suspended operations. (Reporting by Michele Kambas; Editing by Dan Lalor) ($1 = 0.7253 euro)