Bermuda Aviation Services (BAS) boosted its net earnings by more than 12 percent for the first half of this year, with the overall results only six percent behind its full-year results for 2007.

Net earnings for the six-month duration were $2.2 million and operating income hit a record $2.6 million as the company enjoyed a successful trading period.

But BAS group president, Kenneth Joaquin, warned of the impact of the current financial crisis and its knock-on effect on Bermuda's economy in the future in his report to shareholders on the firm's half-year results.

"BAS has achieved a marked turnaround in its performance," he said.

"These results have been a consequence of our senior executives tackling many of the challenges identified in our last annual report and diligently executing our plan to restore the company's earning potential.

"The results, we believe, stand on their own merit. Whilst we are pleased with these results we are mindful of the current and future global economic challenges and their knock-on effect on the Bermudian economy."

However, Mr. Joaquin said BAS' subsidiary ASB Ltd. had been directly impacted by the collapse of Zoom Airlines earlier this year, causing it to incur a $150,000 write-off in the opening six months of 2008, with another write down expected later this year.

But he said the diversity of the business and strength of other parts of the operation had enabled BAS to produce successful results for the first six months of 2008.

"Once again, the wisdom of our diversification has proven well-founded," he said. "For while ASB Ltd. has struggled the rest of the group has carried the mantle. BAS-Serco has exceeded both last year's results and our budgetary expectations and continues to move from strength to strength.

"Otis Bermuda Ltd. has also exceeded both prior year and budgetary performance. As we continue to execute our plan to streamline and create efficiencies, we have recently made the decision to make Otis Bermuda Ltd. a sub-division of BAS-Serco Ltd.

"IBC Ltd., despite the continued pressure of increased carrier costs, has done well in the first six months. However we are ever-mindful heading into the second half of the year with a looming economic slowdown of the impact on our ZipX product. After an uninspiring performance last year, CCS Ltd. has produced stronger results and has performed to expectations. Weir Ltd. continues to produce consistent and steady results having had a solid first six-months.

"The next half of the year holds many uncertainties for the local economy and as such we intend to remain vigilant and look for efficiencies and opportunities to strengthen BAS. Nonetheless, we believe that our full year results will bear out the prudence of our actions and be commendable. "