Cyprus tourism sector welcomes new airline incentive scheme

The Cyprus Hotels Association (Pasyxe) on Thursday welcomed the cabinet’s decision to approve a €165 million incentive plan for airlines for the period 2023-2027, whose primary objective is to bring in up to 13.7 million visitors.

The incentive plan had been previously proposed jointly by the ministries of transport and finance.

The association noted that the previous scheme, which ran between 2012 and 2022, contributed significantly to Cyprus’ efforts to improve its air connectivity, adding new routes and new partnerships with airlines, something which was particularly apparent during the peak of the Covid-19 pandemic.

“We are convinced that the new incentive plan will contribute to encouraging third-country air carriers to operate for travel to the island, achieving a further increase in passenger traffic and facilitating the revitalisation of Cyprus tourism, which has been affected by the pandemic and the war in Ukraine over the past three years,” the association said.

What is more, the association praised the Ministry of Transport and Ministry of Finance, as well as the Deputy Ministry of Tourism, “for jointly submitting the proposal, with the aim of addressing the new challenges of air transport in the competitive and changing environment that has been formed internationally”.

Meanwhile, the Association of Cyprus Tourist Enterprises (Stek) on Thursday also welcomed the approval of the incentive plan, saying that it was particularly satisfied with this outcome.

“The incentive plan that was jointly proposed by the two ministries is pivotal for the future of the Cypriot tourist sector, especially with the various challenges that the sector will continue to face in the coming years,” the association said in a statement.

“The ongoing war in Ukraine, the energy crisis in Europe, as well as the high levels of inflation will inevitably affect people’s willingness and capacity for travel,” the association added.

The association explained that in this context, the incentive plan will stimulate the development of Cyprus’ air connectivity and boost its ability to expand air routes, something which it described as being crucially important.

“As an association, we have previously sent letters and released statements where we stressed the immediate need for the adoption of an incentive plan for the period between 2010-2022, something which has proven to be very successful,” the association said.

“It is indicative to observe the Deputy Ministry of Tourism’s forecast that the new incentive plan will result in a 52 per cent rise in tourist arrivals, rising from 9 million in 2022 to 13.7 million by 2027,” it concluded.

As previously explained, 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.

Finally, the government will contribute 49 per cent towards the cost of the project and Hermes 51 per cent. However, these numbers will drop to 27 and 73 per cent respectively, since the operator will continue to pay the concession fee of 32.38 per cent.