Agreement paves way for major upgrades
The Cypriot government and Hermes Airports signed a new agreement on Monday, extending the management of Larnaca and Paphos airports until 2033.
The deal resolves longstanding financial disputes and paves the way for significant airport expansion projects aimed at boosting Cyprus’ aviation sector.
“Following months of negotiation, the agreement outlines the commencement of Phase 2 construction projects at Larnaca and Paphos airports, along with the resolution of pending claims and issues that had remained unresolved for years,” the two parties said in a joint statement following the signing.
The announcement also said that construction work is set to begin at both airports by the end of the first quarter of 2025.
This is pending finalisation of loan agreements between Hermes Airports and financing banks, as well as the necessary planning permissions.
As part of the agreement, the concession period has been extended by 18 months, and a compensation payment of €30 million has been agreed upon.
Additionally, a €20 million loan will be provided by the Republic of Cyprus to Hermes Airports in exchange for the withdrawal of all pending claims related to the operation of the Tymbou (Ercan) airport in the island’s north.
At Larnaca Airport, the construction plans include a 20,000 square metre expansion of the terminal building, the addition of new passenger boarding gates through a new wing connected to the main terminal, and increased aircraft parking space.
The two parties said that completion of these works is expected to take 30 months.
At Paphos Airport, the works will expand the terminal’s area by approximately 30 per cent and include the extension of the southern parallel taxiway to enhance the runway-taxiway system’s capacity and safety.
These improvements are expected to be completed within 27 months of commencement.
“The upgrades aim to significantly enhance the passenger experience at both airports, offering greater comfort and capacity at every stage of the travel process,” the two parties said.
“This agreement’s modernisation of Larnaca and Paphos airports will enable both facilities to handle greater numbers of passengers and aircraft in the short term and, crucially, beyond the expiry of the concession agreement,” they added.
The announcement also mentioned that the agreement will also “foster the long-term development of connectivity and tourism in Cyprus, delivering significant benefits to the local economy for decades to come”.
Commenting on the agreement, Transport Minister Alexis Vafeades said that “the sharp increase in passenger traffic achieved through our joint efforts with Hermes Airports, the Deputy Ministry of Tourism, and our tourism sector partners has made the expansion of the two airports essential“.
“We are pleased to have reached this significant agreement with Hermes Airports, which is pivotal for the long-term development of our airports, the establishment of new air routes, and the continued economic growth of Cyprus,” the minister added.
Vafeades also said that “the planned expansions will enable the airports to accommodate over 17.4 million passengers, marking a 43 per cent increase from the 12.2 million expected this year, all without imposing additional financial burdens on public funds”.
“The agreement also resolves disputes in a mutually acceptable manner and enhances the quality of airport services,” he added.



“We remain committed to supporting the aviation sector and furthering Cyprus’ connectivity while bolstering confidence among our partners,” Vafeades continued. “This agreement sends a clear message that Cyprus is open for business and new investments.”
Meanwhile, Christophe Petit, Hermes Airports chair of the board, expressed satisfaction with the agreement.
“We are delighted with the positive conclusion of these negotiations, which offer mutually beneficial solutions to long-standing issues,” Petit said.
He also pointed out that the “Larnaca and Paphos airports were built with an investment of approximately €640 million, and the Republic of Cyprus has received over €607 million in concession fees during the 18 years that Hermes Airports has managed them”.
Moreover, Petit said that “with the agreed projects, the airports will be even better equipped to meet the demands of the new era, extending well beyond the current concession agreement”.
“As the operator, we have achieved much over the years in collaboration with the Transport Ministry and all stakeholders in the tourism and aviation sectors,” he said.
“With full awareness of our significant impact on the Cypriot economy, we look forward to commencing and completing another critical project that will further upgrade Cyprus’ two international airports,” Petit concluded.
Before the singing was completed, Vafeades had told the Cyprus News Agency (CNA) that the agreement “one of the most important contracts for the state”.
Vafeades pointed out that the projects involve “the expansion of the building facilities of the Larnaca and Paphos airport terminals, as well as works on runways that will serve the movement of aircraft”.
He added that “a new building will be created at Larnaca airport, which will also serve low-cost airlines.”
“This agreement ensures that Cyprus can proceed with the immediate implementation of much-needed projects to accommodate future passenger traffic, not only for today but also until 2036,” Vafeades told the agency.
He also said that studies on passenger demand have guided the design of these upgrades.
Vafeades also stressed the importance of the projects in meeting long-term passenger needs.
“We believe the benefits for Cyprus are substantial, as these upgrades will help serve not only current passenger traffic but also projected demand until 2036,” he concluded.
Elswhere, government spokesman Konstantinos Letymbiotis described the agreement as “a development of strategic importance” that safeguards national interests while modernising key infrastructure.
“The favourable financial terms of the new agreement ensure economic stability and enhance state revenues through increased commercial activity and infrastructure development,” he posted on X.
Letymbiotis also underlined the wider benefits of the deal. “With the completion of these projects and increased passenger handling capacity, Cyprus strengthens its position as a regional aviation hub,” he said.
“Our connectivity is enhanced, the tourism industry is further developed, and new jobs are created,” he added.
What is more, Letymbiotis also said that “this agreement is tangible proof of the systematic efforts by the government to safeguard the interests of Cyprus while planning strategically for the future.”
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