During meetings with Minister Nicolaides and Minister Paschalides last week (9 July 2008), IACA airlines urged the Cypriot Government to make improvements to aviation services for inbound airlines or risk damaging tourism in the country.

IACA, which represents 38 airlines serving the leisure industry and 30% of the airline market share in Cyprus (50% at Paphos airport), continues to be extremely concerned by the increasing airport charges and infrastructure costs, as well as the overall lack of support for inbound tourism in Cyprus.

Against a background of a decline in incoming tourism, from the UK in particular, the issues discussed with both ministers were:

• The excessive increase of 77% in airport charges in the last year at Larnaca and Paphos airports, run by Hermes
• The knock on effect of the new charges which make Cyprus up to 150% more expensive than other competitive Mediterranean leisure-based airports
• The concession fee on Hermes revenues allowing the Government to take 33% of revenues earned from the airlines without any financial risk or any commitment to re-invest it back into airport infrastructure
• The current congestion problems at Cypriot airports due to a mismatch between airport terminal capacity with arriving and departing flights, particularly at peak times
• The likely introduction of fuel surcharges
• The possible outsourcing of security and the related costs in the future
• The automatic indexation of airport fees
• The lack of adequate competition in fuel suppliers at both airports.

The delegation also heard about the two working groups recently established by the Government – the ministerial working group which will examine problems at Larnaca and Paphos airports and the Parliamentary working committee to look at ways to improve tourism in Cyprus.

Speaking after the meetings, Luc Geens, Manager Ground Operations, IACA, said: “All of these additional costs are putting a lot of pressure on leisure airlines flying to Cyprus. At a time when there is a strong Euro, the global credit crunch and high fuel prices, the Cypriot government should be doing all that it can to encourage airlines to fly to Cyprus and use their airport facilities. We made these points very clearly to both ministers.”

“We were encouraged by some of the promises made during our meeting and the renewed focus on increasing tourism in Cyprus through the working groups at Government level.”

“During the meeting we were particularly pleased to hear that the Ministers will examine the excessive charges at Hermes airports, proper slot coordination, off-peak incentives to airlines, improved security flow amongst other issues. IACA will be watching carefully to see how much progress is made in these critical areas.”