HERMES Airports Ltd should review its pricing policy on service charges paid by airlines operating out of the new Larnaca airport so that it does not deter future growth in the tourism sector, Cyprus Airways (CY) spokesman Kyriacos Kyriacou said yesterday.
Kyriacou said: “The new airport is a jewel in Cyprus’ crown. We all needed the new airport – airlines, tour operators, the wider tourism sector. It offers very big potential for growth in all areas, but this has to be on the basis of an appropriate pricing policy, one that does not act as a deterrent.
“This is no time to be overcharging. We should be spreading our wings, not folding them.”
According to the airline’s spokesman, with the opening of the new airport CY faces “a dramatic increase in costs” estimated at €4 million a year. “This covers all charges – landing, take-off, refuelling, etc. – but they are likely to go up further as new facilities are added”, he said.
One extra charge relates to the new “sky-bridges”, allowing passengers to board aircraft and disembark without having to wait for shuttle-buses, which serviced all flights at the old airport.
“The charges for sky-bridges are levied on an hourly basis, making them more expensive than the shuttle-bus service. But we can’t refuse to offer this service to our customers, when our competitors – who operate far fewer flights – choose to use it”, Kyriacou said.
Hermes Airports has come under fire over its charges tariff from the International Air Carriers Association (IACA), which represents 34 airlines serving the leisure industry and has 26 per cent of the airline market share in Cyprus.
IACA condemned this year’s nine per cent increase in airport charges, which followed “an outrageous increase” of 77 per cent the previous year. It said that the knock-on effect makes Cyprus up to 115 per cent more expensive than other competitor destinations.
IACA Operations Manager Luc Geens said in a press release earlier this week: “It is inappropriate in today’s difficult environment to add more costs for our carriers and making Larnaca one of the most expensive airports in Europe to fly to.”
During a visit to Cyprus in March 2009 to meet aviation and tourism industry representatives, IACA representative Roland Taylor said that when IACA had its first meeting with government officials in Cyprus in 2007, it urged them to take concrete steps to encourage airlines to return to Cyprus.
IACA warned then that tourism on the island was stagnant, and unless the government took urgent action to put long-term measures in place, numbers would drop further. “We were laughed at; and now you can see the results”, Taylor said.
In the current economic climate, tourist arrivals are down 11 per cent, and air traffic is down seven per cent compared to 2008. To facilitate more air travel during the crisis, the government has been subsidising 25 per cent of the landing charges paid by airlines, and paying an additional €4 per traveller. However, the subsidies are only set to continue until April 2010.
Meanwhile, under its agreement with Hermes Airports, the government receives an annual payment of €3.5 million plus 33 per cent of gross revenues in concession fees every year.
“Cyprus needs long term planning, long term incentives, realistic pricing, and to remove the ridiculous 33 per cent, which goes to the government. We don’t experience this in any other of the destinations in Europe,” Taylor said.
CY spokesman Kyriacou said: “We’ve been bled dry since 2006, on a basis which penalises us especially. We are the biggest user of Larnaca airport, so we are affected most by any pricing policy. But it’s our home – we can’t go anywhere else.”
When contacted yesterday, the spokesman for Hermes Airports said that the company had “no comment whatsoever” to make on the question of charges paid by airlines.
