The cabinet on Wednesday approved the €165 million incentive plan for airlines for the period 2023-2027 to bring in up to 13.7 million visitors, which had been proposed jointly by the ministries of transport and finance.
The plan is worth €165.6 million and will be co-financed by the transport ministry and airport operator Hermes Airports Ltd.
The implementation of incentive plans between 2012 and 2022 was a necessary tool in the efforts to develop Cyprus’ air connectivity and had as a primary objective the development of new routes and the increase of passenger traffic, an announcement by the ministry said.
Specifically, 113 new routes were developed, passenger traffic increased from 7.3 million passengers in 2011 to 11.3 million in 2019, with an additional €67 million in revenue to the state through the concession contract.
The new incentive plan is a continuation of the relevant trade agreements implemented for the period 2012 2022, with the participation of the airport operator (Hermes Airports Ltd) and the transport ministry under relevant trade agreements.
The government will contribute 49 per cent towards the cost of the project and Hermes 51 per cent, percentages which are reduced to 27 and 73 per cent respectively since the operator will continue to pay the concession fee of 32.38 per cent.
The goal for the next period is to further improve the country’s air connectivity by developing new routes, maintaining and developing the existing ones, extending the tourist season, but also the recovery of air transport from the effects of the pandemic, the war in Ukraine and the challenges facing aviation in today’s competitive and changing environment.
It was also noted that as competing airports implement similar incentive plans, the non-implementation of an incentive plan by the republic’s airports could result in a significant loss of airlines, passengers and net revenue for the state and the wider economy.
It is expected that the implementation of the new incentive plan will bring about a 52 per cent increase in the number of passengers from approximately 9 million in 2022 to 13.7 million in 2027 and an additional €56.9 million in net revenue to the state through the concession contract.