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