2020 Cyprus Country Report

Transport & Logistics
Sector Profile
of the new passenger terminal, Cyprus was in a
favourable position to act as a stop for cruise ships
in the Eastern Mediterranean, being a single day’s
sailing from such destinations as Rhodes, Crete,
Alexandria and Port Said. Naturally, the coronavirus
pandemic has ground cruise liner traffic to
a halt and expectations are that cruise visits will
not resume before 2021. Of the 72 cruise ship
arrivals that were expected in 2020, some 55 of
which were scheduled for October-November,
have been cancelled.
Despite the current difficulties in the cruise
sector, the decision of a leading international
cruise company to anchor its liners in Cyprus
came as a welcome boost. Six advanced passenger
ships operated by cruise giant Carnival are
laying up with crew on board in Moni anchorage,
east of Limassol, for the duration of the
Covid-19 imposed restrictions that have halted
cruises worldwide. The ships include Bahamasflagged
Seabourn Encore and the brand-new Sky
Princess flying the Bermuda flag. This followed
an official announcement by the Cyprus shipping
authorities in May offering facilities for cruise
and cargo ships to dock in its ports for refuelling
during the global lockdown, with operators and
shipowners also allowed to bring their vessels
to the island for a ‘hot lay-up’, which means the
vessel is idle but can be mobilised back into
service at short notice. As commercial air traffic
gradually resumes, crews stuck on board ships
beyond their contractual obligations, will be able
to return home with relief crews coming in. The
decision by Carnival presents significant financial
benefits for Cyprus, and other cruise operators
and companies with oil platforms have also
expressed an interest to follow suit.
AIR CONNECTIVITY
Cyprus’ two international airports broke records
in 2019, with Larnaka (LCA) and Pafos (PFO) together
handling an unprecedented 11 million
passengers, constituting a 60% increase in passenger
traffic from 2013. The smooth operation
of these airports is vital to the island’s economic
prosperity, built on a flourishing tourism industry
and an expanding centre for international
trade and global business. Over 70 airlines fly
from Cyprus to around 40 countries and 120 destinations.
Through their operations, Larnaka and
Pafos contribute approximately 4% to the country’s
GDP whilst it is estimated that over 18,000
jobs are sustained at the two airports and in the
wider tourism industry of Cyprus.
With the harsh realities of the global pandemic
continuing until the foreseeable future, Cyprus
sprang into action to support aviation and its
tourism industry. In June 2020, the country
launched a new scheme to support aviation to
stimulate passenger traffic by providing incentives
for airlines to conduct flights even with low
occupancy rates. The European Commissionapproved
scheme, which will run for six months
with a budget of €6.3 million, will see the government
subsidising airlines based on their occupancy
rate index, with sums to be rolled out for
flights conducted with occupancy rates between
40% and 70%. The goal is to promote direct connectivity
between Cyprus and other countries
and motivate airlines to operate flights to the
island until the end of the year.
Cyprus has also managed to improve its
connectivity to the rest of Europe even amidst
the corona crisis with Hungary’s Wizz Air announcing
its plans to make Larnaca its 28th base
from July 2020 and to launch 11 new destinations
to seven European countries from Larnaca.
Stationing two Airbus A320 aircraft will provide
one million seats on sale from Larnaca this year,
underlining the fact that the airline sees the potential
and the demand for low-cost travel in
Cyprus as a rapidly developing tourist destination.
Wizz’s Larnaca operation seeks to create
over 100 new direct jobs with the airline plus
more in associated industries.
GROWING TRANSPORT AND
LOGISTICS CENTRE
Cyprus has developed an efficient business environment
and can draw on a deep pool of highly
qualified human talent. With a pro-business
government committed to safeguarding the
island’s attractive, EU-approved tax regime,
Cyprus is attracting more players and investors
to support the expansion of its transport
and logistics sector – with enormous potential
in attracting more transhipment cargo. Despite
the global challenges due to the coronavirus,
Cyprus has been fast to act to solidify its status
as a key East Med transport hub and vowed to
double its air and sea connectivity resources to
€15.7 million by the end of the year. Ports are
continuing to operate normally with cargo, and
flights are resuming with all the required safety
measures and protocols in place. The island
nation has truly leveraged its strategic location
and is investing heavily to further develop its
infrastructure to become a major transport and
logistics centre for sea and air traffic. n
Discover more at www.cyprusprofile.com
If there is
one thing the
pandemic
has taught
us, it’s the
fact that we
should take the chance to
follow the path less known,
to explore the potential of
new markets, to look into
new tourism segments and
promote Cyprus as a sustainable
destination. Whatever
assumptions we may make
now about passenger
numbers for the year ahead,
would be premature. However,
we expect that 2021 will be
a significantly better year
with a scope of improvement
over the next three years.
Eleni Kaloyirou
Chief Executive Officer
Hermes Airports
The €1.2 billion
redevelopment of
Larnaca port and
marina is the island’s
largest infrastructure
project of its kind
Two international airports
Pafos (PFO) and Larnaka
(LCA) and 70+ airlines
Logistics companies
are investing heavily in
technology, equipment
and warehousing, in
response to growing
demand for transhipment,
processing and reexport
services
148 Country Report CYPRUS 2020