Eurocypria to add Tehran, Kenya flights from Cyprus

Poland’s Itaka, “others” keen to invest

State-owned carrier Eurocypria plans to fly to Tehran and Kenya this year, as the airline attracts fresh charter business from its existing client list of central and northern European tour operators seeking out new destinations.
Chairman Eleftherios Ioannou told the Financial Mirror that the new destinations are part of Eurocypria’s strategic plan introduced last summer that includes restructuring, maintaining low costs and increasing the yield per seat by becoming more efficient.
Cyprus has been trying to attract tourism from Iran, offering packages during the Iranian national and religious holidays, while developers are also keen to sell holiday homes to Iranians who have a higher national income and can afford to invest in Cyprus, thus securing a long-term visa or visitor’s residency permit.
Responding to management and trade union criticism from troubled national carrier Cyprus Airways that the charter airline should close down, Ioannou said that Eurocypria’s operating cost is 30% below CAIR and thus more attractive to tour operators.
“We only fly to where our tour operators want us, just like a tourist coach,” Ioannou said, adding that CAIR “has fixed routes, just like the urban buses.”
Eurocypria has been thrown a lifeline by a Polish tour operator that is keen to take a minority stake in the company and use this investment to expand its operations.
The chairman of the state-owned carrier said that once the government approves a 35-mln-euro capital increase programme, other investors may also bid for a share in the airline that operates charter flights to Cyprus and Greece, mainly from central and northern European airports. The capital injection plan is currently being reviewed by the Accountant General of the Republic.
Financial Mirror sources have confirmed that the Polish bidder is the country’s leading tour operator, Itaka, that already charters Eurocypria aircraft to take tourists to Mediterranean and north African holidays.
However, the Eurocypria chairman also lashed back at attacks from Cyprus Airways management and unions, who have been demanding that the charter airline be shut down in order to save the troubled national carrier’s survival. He added that there was no question about merging back with Cyprus Airways, but there was scope for cooperation to reduce costs.
Eurocypria operates a lean operation of six aircraft with 250 staff and crew and has a turnover of 100 mln euros, placing it on a path for quicker recovery than Cyprus Airways that is burdened with higher staff costs and loss-making routes.
According to the charter airline’s chairman, the company has already sold 70% of its seat capacity for 2010 and is expected to complete its programme for the whole year.
Despite recommendations from Easyjet board member and former CAIR consultant Vassilis Doganis that the charter carrier would no longer be viable as an operator to Cyprus, Eurocypria is expected to overturn its accumulated losses of 13 mln euros very soon.
“The company is in a state of full recovery,” chairman Ioannou stated.
“Cyprus Airways does have problems, but it is not up to us to say that,” Ioannou said, adding that “unfortunately, the opposite is true,” whereby the national carrier has been critical of the charter operator for nearly a year.
Ioannou’s statement sparked an announcement from CAIR that it “never aimed to be in conflict” with the charter operator, insisting that “Cyprus cannot withstand two state-owned airlines competing with each other which will unavoidably lead to catastrophic situations for both.”
The ink on CAIR’s announcement had not yet dried when it made and announcement of its own, saying that it would operate 100 charter flights this summer to Greece, Italy, Spain, the Czech Republic and Egypt’s Sharm El Sheikh resort, many of which are destinations already served by Eurocypria.