* “Use it or lose it” – CEO wants other airlines’ licenses revised; Russia-China-Iran most promising future markets *
Cobalt became the island’s new national carrier this week as it launches its first familiarisation flight to Athens and is ready to start commercial operations, as soon as the government issues the air transport license “within a few days”.
The privately-owned airline, managed by experienced aviation officials at all levels, secured its Air Operator Certificate on May 18, after successfully completing a test flight with its first Cyprus-registered Airbus A320, from Larnaca to Heraklion.
A second aircraft arrived on Tuesday, a third is expected by June 15 and a fourth by the end of the month. The airline has set a target of five or six airframes of A320s and A321s by the end of the summer season, with the aim of carrying at least 20% more passengers than Cyprus Airways did in the summer of 2014.
“We have come a long way, from a three-man team in January 2015, to seven people a year later and now our ground staff and flight crews number 160. About 90% of those are Cypriots and many are former Cyprus Airways staff,” Cobalt’s CEO Andrew J. Pyne told the Financial Mirror in an interview.
He said that at the present rate of growth in demand, the airline’s staff numbers could rise to 200 by the end of the year, while “given the opportunity, revolving around air traffic rights to non-European destinations and our aim to become a transit hub, we could target 500 to 1,000 jobs in the next five years.”
“We have the right support from the government in allocating air traffic rights to wherever we want in Europe. Outside Europe, we need allocation of traffic rights or renegotiation of existing rights allocated to other airlines that are not properly utilising these licenses.
“If the government allocates us these rights, then we can start flying east of Cyprus and bring in traffic. It is unacceptable that some airlines were allocated traffic rights a year ago and never exercised them – there should a use-it-or-lose-it principle,” Pyne said.
DE FACTO FLAG CARRIER
“We are now the de facto Cypriot national airline and flag carrier, with Cyprus registration of our aircraft and ‘Cyprus in your hearts’ on the side of the aircraft promoting the island as a tourist destination wherever we go.
“If we can create a hub in Larnaca the benefits will flow to all towns and will reach every corner of the island. All we are asking for is fair treatment,” he said.
Pyne said that the main effort will be on short-haul destinations, with Athens being the most important. The UK has great potential, while Russia will be developed fully next year, with new routes such as Iran promising great prospects as well.
As regards the passenger profile, Pyne said “we are targeting everybody, I don’t think it’s a question of this airline trying to confine its marketing approach. We are very concerned on drawing transit traffic through Cyprus, a segment which is new and could account for 20% of our total business. The remainder will include some business, a lot of family related, visiting friends and relatives, and a lot of leisure.”
However, for now, Pyne said that the airline does not have plans for loyalty programmes.
“Of course, loyalty programmes are more associated with full service airlines, but it could be possible in some form maybe down stream – not this year in 2016, but potentially in subsequent years.”
80-90% OF BOOKINGS IN DIRECT SALES
With the tourism industry expecting 2016 to be the best-ever in recent years, Cobalt’s CEO said they are talking to operators all the time. “But our main focus is direct sales through our website.”
He said that the aim is to achieve 80-90% of sales through the website www.cobalt.aero and that the company is considering launch a mobile app later this year.
“A lot of that rise in tourism will be associated with the Russian market. Russians are increasingly finding travel constraints due to difficulties in their market. It is unlikely that we will operate to Russia this year, due to the hindrances of the Turkish overflights, but we have big plans for 2017.
“For now, our focus will be on the key markets of the UK, Ireland and northern Europe. Greece is a very important market for us, not so much for tourism, as much for the long standing cultural and historical links. Potentially we are also looking at Italy, Israel, Lebanon, and Iran is certainly a new market.”
As regards Cobalt’s price advantage over other airlines, Pyne said, “we are a low cost carrier with a difference – our key difference is that we are a hub carrier with a low-cost structure, but with prop-up and innovative features.”
“We looked at the concept of a ‘Business Light’ service, but this won’t be a feature in our first year of operation. We will maintain an all economy class seating, with single-class products, but we have some innovative solutions to offer.
RUSSIA, IRAN AND CHINA
An the issue of the high cost of operation to Russia or Iran, because of Turkey’s ban on overflights, Andrew Pyne said, “the EU as a whole is in discussion with Turkey for visa free access. We want to ensure these rights (for lifting of the ban) before any visa free access is accepted with the EU. This is a basic injustice for Cyprus airlines being denied overflights. Cyprus Airways secured a fuel compensation and we would expect the same treatment.”
Looking eastwards to China, he said that “we need an online visa process as we have seen in Russia, on the other hand look at how Chinese tourism to the Maldives has exploded, nowadays up to 60-70% of tourists there are from China and the issue of visas is immensely important.”
“Similarly, visa liberalisation for Iran should also be considered, as the Cypriot visa regime still looks restrictive, it’s a huge obstacle to the development of growth.”
Although long-haul flights are not in Cobalt’s immediate plans, Pyne said this would be a “step by step approach, we first want to build a strong regional network with ten short haul destinations.
“The long-term plans for the Asian market will be to look at Africa, the Middle East and Europe, with some 2.5 mln Chinese working in Africa and all connecting through the Gulf hub. We’d love to move that traffic to Cyprus
Cobalt is 100% owned by New Age Airlines Group, a Cypriot entity with a mix of Cypriot and Far East capital, and the airline’s management is exploring this Asian component to explore new potentials in China or the Far East.
By July, Cobalt will be flying to Athens, Thessaloniki, Heraklion, Chania, London, Manchester, Dublin, Paris, followed by Tel Aviv, East Midlands, Glasgow and Dublin Airport, while Beirut and Tehran are also on the drawing board.
