RECENT state incentives to boost Cyprus’ flagging tourism, which included a cut in airport fees, is too little too late, low-cost carrier Ryanair has said.
“The ones who will survive the [financial] crisis will be those who are flexible and nimble-footed. The urgency being shown by competing countries doesn’t seem to be shared by Cyprus. We could have been flying tourists in before the crisis broke“, Berger told the Sunday Mail in an interview.
For the past several years, the Cyprus Tourism Organisation (CTO) has been attempting to woo low-cost carriers such as Ryanair.
However the Irish airline, which recently touted charging passengers to use aircraft toilets, had been pushing for the government to lower airport fees.
“We hoped that the new President would make a difference to the way things were done, and be more open to new ideas“, he said.
“Is the government clawing back one-third of landing revenues the correct thing to do in the current situation? There is a crisis situation. You need to look aggressively at the government’s take of airport fees, which is high in relation to Cyprus’ main competitors. The recently-announced cut in the government share is too little too late. It is a huge lost opportunity.”
Berger said in the current crisis the global tourism sector was evolving quickly and developing new niches.
In this context, major industry players like Ryanair measure the CTO’s performance against their other potential partners. “The CTO’s budget should be tested for value for money. Making mistakes is OK, but keeping on making the same mistakes is not right.”
Ryanair first opened discussions with the CTO in January 2007 on bringing tourists to Cyprus on a scale that would cure the already-present problem of falling numbers. Discussions continued until February 2008, when the CTO decided that Ryanair’s requirements were “prohibitive, and not covered by any EU-approved scheme“.
There are also practical reasons why Ryanair won’t be planning UK flights to/from Cyprus, which take four to five hours compared to the low-cost carriers’ usual ceiling of three hours.
“You have built a new palace of an airport in Paphos, but you need to look at travel costs, fees and so on. To use an election metaphor, our “floating voters” will go where it’s cheaper, like Greece or Malta. They’re the ones who will make the difference, not the “core vote” who will keep going to their favourite destination.”
The airline’s plan was to focus on using Cyprus as a hub for routes to and from various shorter-range European destinations, such as Stockholm, Milan, Pisa, Marseille, Barcelona and Dusseldorf, but also Israel and the Middle East. As Berger put it: “We want to help you guys diversify your market.”
CTO chairwoman Phoebe Katsouri said the organisation could not do this alone.
“It needs the participation of the Ministry of Commerce, Industry and Tourism, the Civil Aviation Department, the airport operators, as well as the potential commercial partners. There needs to be a well-thought out plan in order to meet the objective,” she said.
The CTO is now preparing to launch its Air Route Development Scheme (ARDS), which was given the green light by the EU in April 2008. The ARDS is a start-up scheme for new routes, designed to connect Cyprus with new European destinations, and it complies with EU directives and regulations, which ban direct subsidies in the airline industry.
Berger welcomes the prospects offered by the ARDS: “As soon as they are prepared to talk, we’ll talk. If things go well, and we have the aircraft to allocate, we could start flights as early as February next year. This would mean that tickets would have to go on sale five to six months in advance,” he said.
But he was critical of the timing. He said: “Launching the ARDS now means the CTO has lost a whole summer. Getting market share back will be hard enough, without bad timing.”
Responding to this particular point, Katsouri said: “We’re a semi-governmental organisation, spending government money, so we must remain absolutely within our statutes in everything we do. We have winter 2009 and the whole of 2010 to aim for.”
Katsouri also pointed out that there are more flights to and from Cyprus now: “We have new routes, new airlines who came to us. We’re not unresponsive, but what is proposed needs to be doable and logical.”
Katsouri was referring to increased traffic to/from the Gulf states. As of 1 December 2008, Emirates increased the number of their Dubai flights to a daily service, complementing the three flights per week by Cyprus Airways. Jazeera Airways now runs three flights per week from Kuwait, and from June 2009, UAE national carrier Etihad Airlines will be flying three days a week Abu Dhabi.
However, the CTO seems to have already taken part of Berger’s message on board. Katsouri said that shorter air routes will be more important in 2009-10. “Our strategy has been adapted to take into account neighbouring countries for short-range tourism. We are modifying our allocation of marketing resources – advertising, for example – to address these markets.”
To be fair, the government and CTO are putting real effort into opening up new markets and developing existing ones, having sent high-level missions to Germany and Russia recently and planning missions to Philippines and China.
These new flights have been welcomed by the hotel sector. Katinos Socratous, Director of Sales and Marketing for the Elysium Hotel in Paphos and the Mediterranean Beach Hotel in Limassol, said that guest numbers from the Middle East should increase this year: “The flights are there for us to get more business.” Socratous added: “The barometer for Limassol is Russia, especially for the high-end hotels.”
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