FOR DECADES, the airline industry in Cyprus was run by monopoly Cyprus Airways (CY) with its bilateral partners British Airways (BA) and Olympic Airways on the most lucrative routes out of the island: London Heathrow and Athens.
That all changed when Helios Airways, the doomed carrier whose Boeing crashed in Greece last year killing all 121 passengers and crew on board, began offering an alternative to whatever crumbs BA and CY decided to offer the travelling public in terms of cheap fares.
Well, Helios is now well and truly out of the scheduled market to Cyprus, having dropped Athens immediately after the August 14 crash, and finally handing back its Heathrow slot in the middle of January this year.
It is keeping its hard-won slot at Luton, but may only deal in charter seats or online bookings, according to information obtained by the Sunday Mail.
While prices on flights to Greece are still being kept in check by the meteoric rise of private Greek carrier Aegean, the only alternative to Heathrow now are the few empty seats that might be available on some charter flights. In terms of competition, this is hardly a step forward in the new world of air liberalisation that opened on May 1, 2004 with EU accession.
Noel Josephides, vice chairman of the UK-based Association of Greek Cypriot Travel Agents (AGTA), said recently that it was Helios which had sparked off the dramatic fall in fares in Cyprus in recent years.
The comment has prompted Helios founder Andreas Christodoulides to speak out about the changes the airline brought about in the Cyprus market before he sold it to Libra Holidays in late 2004.
Christodoulides said he now feared that the demise of Helios from main routes would throw Cyprus back to the bad old days of monopoly, particularly on the Heathrow route, which Helios began flying in May 2004.
He said that although there were still some cheap seats on empty charters,
“scheduled flights offer the flexibility and frequency”.
“There was always room for a Cyprus carrier to share the market with Cyprus Airways,” he said, adding that in the early days he managed to establish flights to Sofia and Dublin, a destination entirely neglected by Cyprus Airways in the past. “The increase in the Irish market into Cyprus was a fact that could not be denied,” Christodoulides said.
“Another route was Larnaca-Bucharest, which was a monopolistic route by Tarom, and Helios is no longer flying there any more, although it is still flying to Warsaw.” He said Warsaw had been a loss making route for CY, which Helios had taken over as soon as the national carrier dropped it.
“Obviously a lot of central European countries that Helios used to fly don’t operate any more. Helios contributed to the tourism economy of Cyprus. It has helped UK Cypriots to travel to Cyprus with lower fares since November 2002 and also contributed to Cypriot community visiting London,” he said.
“I am concerned that whatever Helios built over the years will revert to certain carriers. and this is a shame. Instead of going one step forward, we seem to be going one step backwards. Cyprus needs an alternative airline. It’s something everyone was thirsting for for years.”
Christodoulides said he could not express in words how he felt about the crash, about the crews he used to work with and the relatives of the victims. “I feel for the people, the families. I couldn’t sleep. I never imagined this would happen to the airline I founded. We were the pioneers. This is bad for the consumers and bad for everyone. But of course people who lost relatives can’t be expected to think about that,” he said.
A airline insider agreed that Helios had made a huge difference to the market in Cyprus before the accident. The insider said at the time that CY had two flights a day at 4am and 6.30pm. BA also had awkward hours, he said but had a higher load factor and performance than CY.
“Of course the reason for this performances had little to do with the fares. It was the BA network, the reputation of BA, and a bigger market. Because of this ability they were generating higher fares with more business class people than Cyprus Airways,” said the insider.
In 2003, before Helios entered the route, the air fare to Heathrow was around £180 plus taxes, “mostly return, relatively inflexible”, said the insider.
Helios started flying to Luton in 2003. “Suddenly there was a new carrier on the route, also going to London. Helios had the advantage of the morning flight at 8.30am so you could be in London before lunchtime. It was much more convenient than Cyprus Airways’ 6pm. Cyprus Airways had a good plane, much more comfortable and bigger, they had a frequent flyer programme. Helios had a small plane, no business class, no frequent flyer. It only had good timing and a destination perceived as a second-class airport, so the only thing it could promote was fares,” the airline insider said.
The basic fare thus started at £120 plus taxes although it also had some promotional fares at £99 return.
BA and CY suddenly dropped to around £130 return but they had very few seats on that fare and sometimes only on the night flights. That was 2003.
In May 2004 Helios began flying with the big boys into Heathrow with one flight per day, departing at around 6.30pm, still with no frequent flyer programme and no business class.
“Cyprus Airways reduced their fares from £130 to £119,” said the insider. Helios stayed the same as Luton at £120 but also had £99 fares to promote the route.
“The airline had to be slightly cheaper than Cyprus Airways because it couldn’t compete on anything else,” said the insider.
Throughout 2004, Helios had an average load factor to Heathrow of around 74 per cent, compared to some 70 per cent for CY and roughly 85 per cent for BA. This continued into 2005 until the Helios crash, but even after the company maintained a strong load factor out of the UK. In October, it was 71 per cent and in December it was the same as CY’s. Even Prince Harry travelled to the island with Helios before Christmas last year.
Helios continued with Heathrow until the middle of January, even though it was not doing badly. A decision was taken to alter the structure of the airline and turn it into a charter firm by the name of ajet, a controversial decision that is still pending official approval.
“Where the airline would have four or five planes this year if the accident hadn’t happened, this year it will continue with two aircraft,” the insider said.
A similar story surrounds Helios’s entry to the Greek market.
It decided on an initial fare of £29. “It wasn’t that much less than the Cyprus Airways’ (CY) £35, but it was a good start,” the insider said. CY got upset and lowered its fares from £35 to £25 but increased the number of seats on the £25 fare. Helios retaliated and went down to £19. The airline had sent a message to CY that it was here to stay and that the only thing it was able to compete on was price. The lower Cyprus Airways would go the more damage it would do to itself.
“But I think now, with so many surcharges and fees coming along, and with the return to the monopoly of Cyprus Airways and British Airways, the time when Helios offered £99 plus £25-£30 taxes are gone and they are not going to come back,” said the airline insider.
“There is no new carrier on the horizon. Everyone will remember Helios because of the accident but before that the airline really did make a difference.”
