Airlines encouraged to create Cyprus hub

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Cyprus has introduced an incentive scheme for airlines to relocate their base to the island, as aircraft carrying a Cypriot flag are now exempted from stamp duties.

Following Parliamentary approval, aircraft registered in Cyprus are now exempted from the tax.

Documents related to purchasing or selling aircraft registered in the Cyprus Aircraft Registry are also exempt from fees.

Exemption from stamp duties also applies for lease contracts or an aircraft registered under the agreement within a period not exceeding 60 days from the contract’s signing date.

The bill was tabled to Parliament by the chair of the House Finance Committee, DIKO MP Christiana Erotokritou, who emphasised that similar regulations also apply to ships carrying the Cyprus flag.

Erotokritou said the regulations are expected to contribute to developing the transport sector in Cyprus by providing incentives to attract airlines to establish themselves in the Republic and bring new investments.

During the presentation of two new Cyprus Airways aircraft last week, President Christodoulides said the government would continue efforts to attract airlines to address the issue of connectivity.

He said authorities are working on introducing schedules for key destinations for which the island does not have direct flights, such as Brussels.

Last October, the government approved a €165 mln incentive plan for airlines for 2023-2027 to carry up to 13.7 million visitors.

The plan is co-financed by the Transport Ministry and airport operator Hermes Airports Ltd and continues Cyprus’ decade-long efforts to boost connectivity.

Incentive schemes for airlines are seen as a necessary tool to develop air connectivity, create new routes and increase passenger traffic.

Specifically, 113 new routes were opened, and passenger traffic increased from 7.3 million passengers in 2011 to 11.3 million in 2019, with an additional €67 mln in revenue to the state through the concession contract.

The first half of 2023 concluded on a positive note registering 4,808,431 passengers at Cyprus airports, with a 3% increase compared to the benchmark pre-Covid era of 2019.

Hermes Airports said 3,252,612 passengers went through Larnaca airport in January-June, while 1,555,819 passengers were handled at Paphos airport.