Hermes Airports Ltd., the consortium in charge of modernising Cyprus’ airports at Larnaca and Paphos has hit back at recent reports suggesting that it intends to hike airport charges by 300%, clarifying that airport fees will only increase by 42% by end June 2007.
Hermes Airports was awarded the concession for the development and operation of the Larnaca and Paphos International Airports, on May 11, 2006 for a term of 25 year. Amongst others, the concession agreement signed with the government provides for the gradual introduction of a number of new fees such as: Ground Handling Fees, Security Fees and Fire fighting and Rescue Fees.
These services were currently provided by the Government of Cyprus but not charged to the airlines.
In addition, the Concession Agreement gives Hermes the right to apply a per litre fuel charge for all refueling done at the airports and which is common practice in most airports of the world.
The Concession Agreement prohibits Hermes from introducing any charges other than those stipulated in the Agreement and further, any increases in these charges for the duration of the 25 year agreement are strictly regulated.
In the context of the Concession Agreement Hermes has communicated to the airlines the new charging levels as follows:
Departure and Arrivals Landing, Parking, Busing and Passenger Fee from existing CYP 11.33 will be maintained until end of June 2007 at CYP 11.33.
Fire & Rescue, Security, Ground Handling from zero now to CYP 1.35 from May 2006, then CYP 2.47 from July 2006, CYP 3.59 from January 2007 and CYP 4.72 from July 2007.
Hermes says the total fees will increase by 21.8% to CYP 13.80 from July 2006, then by 31.7% from January 2007 and by 41.6% to CYP 16.05 from July 2007.
The above fees are per passenger based on two typical types of aircraft that use Larnaca Airport, Hermes said.
Competitive
Hermes says it has thoroughly investigated the competitiveness of the Cyprus Airports and the level of charges at other airports. The new level of charges, which as already mentioned shall be introduced gradually over a period of 12 months from May 2006, will place Larnaca and Paphos airports within a similar pricing range to other similar Mediterranean airports, such as Nice – France, Faro – Portugal, Marrakesh – Morocco, Antalya – Turkey and they will be much cheaper than other Mediterranean airports such as Valetta – Malta and Spata – Athens.
The new charges also take into account the annual increases in staffing costs, electricity, fuel and other operating expenses and customer services, costs which in recent times have experienced above average increases. These are no longer subsidized by the Government but are a direct cost to Hermes just like any other business. Hermes understands and sympathizes with the difficult position of Airlines as a result of the intense competition and reconfirms its commitment to continue cooperating with the airlines and the tourism industry to develop the tourism and aviation sectors, create new employment opportunities for our young people and add value to the economy of Cyprus.
Huge investment
The investment for the development of the two new terminal buildings will amount to EUR 643 mln. Through this investment Cyprus shall acquire modern, state of the art airports which shall immensely improve the service levels for both passengers and airlines alike. These airport redevelopment works will further consolidate and indeed grow Cyprus’ position as a Mediterranean tourist destination.
The success of Hermes is very much linked with the success of the tourism and airline industries. For this reason Hermes is making sure that the Airports of Cyprus will remain competitive whilst at the same time offer the best possible service.
Finally, regarding various complaints regarding the level of cleanliness of all the public areas in the two airports and especially the toilets, Hermes Airports wants to inform that the cleaning teams of both airports have been reinforced in order to achieve more effective cleaning.
