Cyprus Mail
Business Cyprus

CTO wades into airport charges wrangle

By Constantinos Psillides

A PROPOSAL by the Cyprus Tourism Organisation (CTO) boss to look at lowering airport landing fees was met with a terse response yesterday from Hermes Airports, which said there were many reasons airlines and tour operators did not choose Cyprus.

CTO Director General Marios Hannides told reporters earlier in the day he would put together a proposal aimed at lowering airport taxes.

“CTO is formulating a plan which will be discussed once ready with Hermes and the ministry of communications in order to find ways to reduce airport taxes.

Such a move would assist in the effort to develop Cyprus tourist product,” said Hannides, claiming that statistical data showed that airport taxes charged by Hermes were very high compared to other European countries.

CTO director said that the proposal would be ready within a month.

However, Hannides intention prompted an immediate response from Hermes Communications Director Adamos Aspris, who said that the CTO was adopting the position of airline companies uncritically.

“We expect that international airlines will frequently ask for airport taxes to be lowered. What saddens us is that tourism industry authorities reflect that demand, knowing full well that Hermes, along with the state, offers incentives to 30-35 airline companies resulting in much lower taxes,” said Aspris.

Asked about the level of airport taxes, Aspris refused to comment, saying that he wasn’t aware of any such statement. However in a written statement later in the day, he said all suggestions and ideas concerning ways of improving the competitiveness of the island’s airports were welcome, “always having due consideration to the provisions of the Concession agreement with the Government of Cyprus and the commercial viability of the company”.

“It is a common knowledge that Hermes Airports have been undertaking a number of initiatives aiming to the development of air connectivity to Cyprus and thus supporting growth of tourism,” he said.

Five incentive schemes are available to all airlines, effectively reducing the airport charges, and currently 35 airlines make use of those schemes and contribute to growth of passenger arrivals to the island, Aspris added.

“We do aspire and at the same time we are confident that along with Hermes efforts the rest of the tourism stakeholders will work towards solving long standing problems of Cyprus competitiveness, such as seasonality, hotel infrastructure, Cyprus’ brand and promotion – all important factors that airlines and tour operators have repeatedly noted as reasons for not choosing Cyprus for their holidays.”

The discussion on airport taxes was prompted following a comment made by Ryanair Chief Executive Michael O’Leary on Tuesday, saying that airport taxes in Cyprus were among the highest in Europe and double that of Berlin airport. O’Leary claimed that high airport taxes was the reason Cyprus lost half a million passengers over a five-year period since 2008.
“The place is stagnating,” O’Leary had said.

It is understood that high airport charges was one of the reasons Ryanair stopped using Larnaca airport within the first year it operated there. Airport taxes and fees are calculated differently by different airports. Distance can also be a factor.

Hannides’ comments about possibly lowering the fees were made during a press conference yesterday on CTO restructuring and on tourism revenue. According to Hannides the industry saw revenues of €2 billion so far this year.

“Tourist arrivals in June were up by 11 per cent while revenue from January until today has climbed 6.0 per cent,” he added.

“The goal is to increase this percentage so that we can support the economy. We are on the right path but there are still many things which have to be done to achieve our goals”.

Responding to questions, Hannides said that more Cypriots were being employed in the tourist sector. He said the matter of being able to speak Greek in order to work in hotels would be discussed at a joint meeting between the CTO, minister of labour and the Cyprus Hotels Association.

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