COVID19: Cyprus bolsters airline incentive scheme

Cyprus’ Cabinet on Wednesday increased state subsidies available to coronavirus-stricken airlines budgeting €8.8 mln for the next six months to boost the island’s poor connectivity until 2022.

Airlines are paid a rate for each passenger if flights arrive in Cyprus less than two-thirds full.

The scheme was introduced in June 2020, following the first wave of coronavirus, to help airlines overcome difficulties brought on by the epidemic.

Transport Minister Yiannis Karousos told reporters said that from January until June this year, some €4.4 mln was given to airlines to encourage them to keep their Cyprus routes alive.

Another €6.3 mln was spent from July to December 2020.

The scheme had been approved by the EU and subsequently praised by the Commission.

He is optimistic that the scheme’s extension will boost dwindling tourist arrivals.

The Republic of Cyprus’ incentive plan is fully funded and uses aircraft occupancy rates as a metric.

To be eligible, airlines must achieve a flight occupancy rate above 40%.

Beyond that, under the scheme, an amount per passenger is paid for occupancy from 41% to 70%.

When there is over 70% occupancy, operations are considered normal market conditions, and no incentive is offered.

Karousos argued the scheme has successfully attracted airlines to add flights to Cyprus from destinations not previously connected; some have established a hub on the island.

Due to coronavirus travel restrictions, tourist arrivals plunged by 84.1% in 2020 from a record 3.97 mln tourists in 2019, marking Cyprus’ worst tourist seasons.

British tourists made up one-third of all tourist arrivals in pre-COVID 2019, with Russia Cyprus’ second-largest market.