The study, dated May 5, acknowledged sufficient air connectivity as the key for any “further economic development onthe island.” As such, the report said, any improvements in air connectivity can be expected to lead to an “increased competitiveness of Cyprus’ tourist product, increased arrivals of tourists, increased revenues and will assist in extending the summer tourist period, thus reducing the huge seasonality problem from which our tourist product suffers extensively for the last twenty years.”
According to the study, despite outgoing travel having contracted by 7% in 2013, it is important for Cyprus to maintain connectivity with a significant number of destinations to boost outgoing travel for business or pleasure, as well as facilitate business travel for foreign business people and investors conducting business on the island.
The report lists weaknesses identified, including the small local market of only 800,000 residents, inflexible airport charges, the perception of Cyprus as an expensive destination, and the fact that Cyprus is a medium-haul destination for most airlines, which does not optimise return on aircraft utilisation and overheads.
On the other hand, the study recognised several opportunities for the Cyprus tourist air-travel market, including the option for individual online booking, the attractiveness of Cyprus as a short-break destination from the Gulf and Middle East due to geographic proximity, and growth opportunities from Eastern Europe and northern countries.
But the economic downturn pervading Europe, and particularly Cyprus, are expected to have a heavy toll on air travel. This, the report argued, would have not only direct consequences but also tangential ones, like the possible deterioration in the financial situation of key players, including Hermes Airports and the Cyprus Tourism Organisation, as well as the significant reduction in Cyprus Airways’ fleet of aircraft and capacity.
In terms of markets, the UK topped the list and is considered “adequately served, especially in the summer period by 10 airlines on 18 routes.” Greece followed, but excessive fares for such a short route “cause concern and prohibit further growth.” A series of markets with which “adequate” air connectivity exists but require further investments in order to grow include Scandinavia, Benelux countries, Central Europe, the Balkan countries, Malta, Russia, Ukraine, and Israel. In contrast, a number of other markets are deemed “underdeveloped”, including Germany, France, Italy, Spain, Switzerland, Ireland. Finally, markets not served but “worth mentioning” are China, India, Japan, Australia, USA and North Africa.
The study concluded that while Cyprus has an overall adequate air connectivity with most markets, there exists a “lot of room for improvement,” both in existing and new markets. Basic proposals to this end were the liberalisation of operations through bilateral agreements that would enable any interested airline to operate in any market, granting 5th freedom traffic rights – facilitating stop-over flights – to specific destinations on a reciprocal basis, developing incentive schemes for airlines with the cost borne either by Hermes Airports alone or jointly with the government, and the implementation of the CTO’s strategic planning for tourist product branding, product improvement, marketing and promotion.
An action plan to be implemented by the department of Civil Aviation is also proposed, mostly involving the liberalisation of the aviation policy and supporting the study’s conclusions.
Source: Cyprus Mail
