The European Commission on Wednesday approved a €22 million loan to Hermes Airports, operator of the Larnaca and Paphos airports, as an aid after the challenges caused by the ongoing coronavirus pandemic.
The aim of the loan is to ensure sufficient liquidity for the company in order to fulfil its financial obligations and continue operating.
The loan was approved under the EU state aid temporary framework adopted on March 19 to provide targeted support to otherwise viable companies that have entered into financial difficulty as a result of the coronavirus outbreak.
The European Commission said the conditions to extend the loan are justified by the fact that both Larnaca and Paphos airports make a significant contribution to the Cypriot economy by ensuring business connectivity and by transporting tourists to the island.
Moreover, the two airports “will help reconnecting Cypriot companies with international customers and boost tourism once the pandemic crisis ends.”
Hermes will receive the funds by the end of 2020, with the loan term set at six years.
“The economic impact of the Covid-19 outbreak is severe. We need to act fast to manage the impact as much as we can,” said the executive vice president of the European Commission Margrethe Vestager.
“The temporary framework enables member states to use the full flexibility foreseen under state aid rules to support the economy at this difficult time.”
Both airports have seen traffic drastically reduced, and the number of working airlines has dropped from 70 in 2019 to 25 currently. Total airport traffic so far this year was down to 2,187,685 passengers. Total traffic for the full year of 2019 was at 11,273,748 passengers.
Traffic has fallen off steadily since August, when Larnaca saw 221,791 passengers, and in September 162,203. Paphos had only 74,475 passengers in August, and 83,076 in September.
Hermes Airports has nonetheless avoided important staff cuts, and has remained in regular operation throughout the pandemic crisis.