articles | 24 October 2015

Cyprus' airport traffic rises in 2015

Hermes Airports has increased its passenger numbers so far this year despite the collapse of Cyprus Airways and the drop in the number of Russian tourists visiting the island, the company’s new chairman Panayiotis Hadjipantelis told the press.

The number of passengers passing through Larnaca and Paphos airports from January to September this year rose by 3.6% to 213,587 compared with the same period last year, and Hermes expects a slight overall improvement in for the full year of 2015 compared with 2014.

“At the beginning of the year we were expecting a decline of about 5% in our passenger traffic.

“However, we didn’t sit back watching the developments in a passive manner. We reacted in a timely fashion and took specific initiatives to alter the situation,” Hadjipantelis said.

“I have to admit that we considered these results very satisfactory. Definitely there is a great margin for further improvement and we remain cautiously optimistic for the rest of the year,” he added.
Hadjipantelis took over as chairman at Hermes Airports Ltd in July after having been a board member since the company’s foundation in 2006.

Hermes runs the airports under a 25-year Build-Operate-Transfer concession agreement with the government, and Hadjipantelis said the Private Public Partnership (PPP) agreement is one of the best of its kind on a global scale.

“Nine years since the acquisition of the two airports’ operations, I believe everyone is in a position to acknowledge that Cyprus has gained significantly from this cooperation between the public and the private sector,” Hadjipantelis said.

He said a study based on 2012 figures showed that the two airports accounted for 3% of GDP, or €500 million.

Aviation provides 12,700 jobs and contributes about €125 million to government coffers, while every new daily flight creates about 100 new jobs in Cyprus.

“Our two airports are a major driver of the country’s economic growth,” Hadjipantelis said.

Hermes is currently working in cooperation with the government on a development and investment strategy for the Hermes’ property, including repurposing and development of old terminals.

Investors interested in developing these old sites must submit proposals by December 21, 2015.

Hermes is working to align various stakeholders and attract more airlines by creating demand for Cyprus as a destination.

Hadjipantelis said the company is working with the government on improving tourism in Cyprus.

“It’s that demand that leads to stronger air service connectivity which, in turn, leads to more visitors and investment in Cyprus, and that creates economic benefits,” he said.

He pointed out that demand is the key for connectivity because airlines are flying to make money for their shareholders. They need multi-segment traffic to fill planes, and therefore look for year-round destinations to place their assets and lower the risk for their investments.

Hadjipantelis acknowledged that there have been problems with long queues at security during peak times at both Larnaca and Paphos airports, and said steps are being taken to improve services.

“We have discussed this issue with the appropriate governmental authorities and my understanding is that steps are currently being taken in order to address this matter in an effective manner,” he said.

Hadjipantelis rejected the suggestion that Cyprus’ airport charges are high.

He said there is a misconception that fees make up about 50% of the cost of an airline ticket, when in fact airport charges are only about €26, but some airlines include in the fees and charges figure the fuel surcharge, the fees for extra facilities requested by airlines for their aircraft and the fees of the airport of destination.

Hermes has a concession agreement with the government under which a significant part of the company’s gross revenue is given to the state, and any airport’s charge is related to the level of investment that has been implemented.

Hadjipantelis said that many of the airports Hermes competes with for traffic – such as Heraklion, Antalya and Cairo – are state-owned and not offering the same level of infrastructure as Larnaca and Paphos.

He also said Hermes offers six incentive schemes that effectively reduce airport charges, and pointed out that Hermes has no control over whether or not airlines pass these savings over to customers.

Hadjipantelis said the potential competition from Tymbou airport in the north of the island will be dealt with if reunification talks between President Nicos Anastasiades and Turkish Cypriot leader Mustafa Akinci are successful.

“Certainly there are many things that need to be taken into consideration and when it is the right time we will deal with these issues,” he said.

Source: InCyprus

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