Duty-free shops head for Hermes control

CYPRUS Airways (CY) will relinquish the operation of the duty-free shops at Larnaca and Paphos Airports on June 30, after a ten-year stint the airline announced yesterday.

“It is widely known that the administration of the Larnaca and Paphos airports has been undertaken recently by Hermes joint venture, which has the right to operate the airport spaces,” a CY statement to the Cyprus Stock Exchange said.

CY said it wanted to thank passengers for their support in the past ten years and that CY products would still be available during flights.

The operation both airports has been taken over by the Hermes group, the consortium that is going to build a new airport at Larnaca and upgrade the one in Paphos.

The government handed over the running of the duty-free shops to CY in 1996 as a means to give indirect aid to the national carrier, which turned out to be a phenomenally successful source of income for the airline until Cyprus joined the EU in May 2004.

From that date passengers travelling within the bloc could not longer purchase goods on a duty-free basis.

In 2005, revenue from the duty free shops fell to £39.3 million, resulting in a pre-tax loss of £124,000, compared to a profit of £3.8 million in 2004, when revenue dropped by £12.4 million as a result of accession.

Last year’s loss was the first-ever that CY sustained during its 10-year operation of the shops. Profits from the duty free shops peaked in 2002 when the company recorded a pre-tax figure of £7.1 million.
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