MEMBERS of the International Airline Carriers Association (IACA) will continue refusing to pay what they say are exorbitant fees to airport operator Hermes, lawyers for the organisation said yesterday.
The 11 airlines, mainly British and German charter firms, paid under protest a total of over £1 million in arrears to Hermes by a 5pm deadline on Thursday, after a threat by the operator to cancel their ground handling services.
If they had not, hundreds of tourists would have been stranded.
The IACA says passengers charges have increased 44 per cent from April 1, and by November will have gone up in total by over 70 per cent, from 18.27 euros per person in January to 32.28 euros.
The arrears accumulated after the 11 airlines, ironically including state-owned Eurocypria, refused to pay the April hike. They say services at the airport are not commensurate with what they pay for and that other airports in the region are two and three times cheaper than Cyprus.
Michalis Kyriakides, a lawyer for IACA, said yesterday the forced payment under threat was not the end of the story.
“The intention is to continue not to pay the increased charges unless we are forced to, but our intention is not to have more situations like Thursday,” said Kyriakides.
“We have called both the government and Hermes to discuss a way to come up with acceptable charges in accordance with the costs involved. We are waiting from a response from the government but until now we have not seen any intervention.”
One third of the airport’s revenue goes to the government as part of the deal signed with Hermes last year to build a 622 million euro new terminal and in the meantime to make the existing inadequate structure at Larnaca operate viably.
IACA has threatened legal action saying Hermes violated EU law by not opening ground handling services to competition. They have also threatened to rethink their Cyprus tourism programmes.
“If until next Thursday nothing changes, the airlines have instructed us to proceed and then they are going to reassess the volume of tourists they bring to the Cyprus market,” said Kyriakides.
IACA members operate over 8,000 flights a year to Cyprus, carrying 1.5 million tourists to and from Cyprus. They account for 30 per cent of total tourist traffic. Kyriakides said many IACA members were already being tempted by incentives being offered from Israel and other Mediterranean countries and were considering channeling some of their Cyprus traffic there.
“Even the government airline [Eurocypria] is disputing these charges,” Kyriakides said. “But we really want to sit down at the table. If the government and Hermes want to discuss it, we have made clear our willingness. If they don’t there will be no other option but to proceed as the airlines wish.”
Hermes was unavailable for comment yesterday, but Government Spokesman Vassilis Palmas said the airlines knew beforehand what the new charges would be through the agreement Hermes had with the government.
“It is an agreement for 25 years, and they all knew beforehand what the charges would be,” he said. He said there was nothing the government could do because the contract was irreversible.
Asked what the government would do in the event the issue harmed tourism in the long term, Palmas said it was not the government’s place to intervene with the airlines.
But the Hoteliers’ Association PASYXE said yesterday the position of the airlines was a serious threat to tourism. The association called on the government to call a truce with the airline and start negotiations to find a compromise.
“It is obvious that the subject has gone from being strictly business differences to being an issue of public interest,” said PASYXE.
“The warning of the airlines of the possibility of drastic cuts in their Cyprus programmes is an unexploded bomb, which will shake the foundations of Cyprus tourism if it goes off.”
