If you thought that Cyprus Airlines Public Limited was closed down, you are right. However, Cyprus Airlines, the new privately run airline company, is on the market and in full operation.
The brand has been completely transformed since Charlie Airlines Ltd, co-owned by the Russian S7 Group, won a tender competition in July 2016 for the right to use the national carrier trademark for the next decade. In a deal signed with the Ministry of Finance of Cyprus, the company has brought Cyprus Airways back to life with a new look and more importantly, a robust business strategy.
“The new era for Cyprus Airways is one of excitement,” says the new company’s Chief Operating Officer, George Mavrocostas. After servicing the skies for 67 years, the predecessor company, Cyprus Airways Public Limited, was forced to close its wings in January 2015 following an EU Commission ruling that found the company was being supported with too much state aid. It was forced to suspend operations after the company was unable to pay back the mandated €66 million to the government.
However, the national carrier hardly missed a beat in the market, being picked up just over 18 months later by international investors. “For us who have worked in the old Cyprus Airways, as I said this run of excitement in the rebirth of the brand like a phoenix. We know a lot about Greek mythology. We are very happy.” Mavrocostas has had an opportunity to work for both the old and the new Cyprus Airways, and says that the biggest difference this time around is the keen sense of understanding the new company’s investors have of the ultra-competitive airline industry. “They know how competitive it is. It is probably the most competitive industry in the world, he underlined. “The fact that they want to invest adequate funds in a patient way to develop the company over a long period of time gives us the confidence that this project will succeed.”
The project he has planned is big. The new and improved Cyprus Airlines has weighty ambitions to take the region’s transportation sector by storm. And given the number of tourists that are pouring into the island in recent years, it seems the market will play directly into the new company’s hand. Based in Larnaca, a city whose airport is currently ranked third among European airports, the company has passenger traffic of 5 to 10 million per year passing through its headquarter city. “Cyprus is a good destination,” the Cypriot native admits. “It is a beautiful island, it has good weather all year round,” he says. But more than anything, “the only convenient way you can visit the island is by air.”
Since its first flight last June, the company has started small but is growing steadily, currently offering four destinations: St Petersburg, Tel Aviv, Rhodes, and Crete. “We started low key to solve any teething problems you may face at the beginning, to be able to expand on a solid footing.” This year, the company is increasing its air fleet, and in 2019 it will broaden its operations beyond the European continent. “Over the next two years the operation will expand to cover both significant markets like the UK and Greece, but at the same time start new destinations in the Middle East and Eastern Europe.”
When it comes to target markets, Mavrocostas says the company has its eye on increased tourism from Russia. “Cyprus Airways is very keen to develop the Russian market, for the reason of course that this is a big market.” In fact, the numbers show that Russians are taking to Cyprus getaways like no other nation. While the island state saw record-breaking arrivals of more than 3.18 million tourists in 2016 (final 2017 numbers should close at an even higher figure), data showed that one out of every four tourists is of Russian nationality.
Despite the increased bilateral ties of these two nations, the airline is forced to weave delicately around Cyprus issue, which prevents the carrier from flying over Turkey. “We have a problem in developing this market ourselves because of the political problem we face with Turkey…there are regions in the Russian market that are not easily exploitable by Cyprus Airways.” However, thanks to the company’s new shareholder, Russian S7 Group, Mavrocostas says, “we have advantage now.” Given that S7 can overfly Turkey, Cyprus Airways will be able to offer trips to and from St. Petersburg and Kaliningrad, and attract visitors from Eastern Russia. “The connection with Russia will help us to overcome the political problem we are facing.”
But it’s not just Russia that has taken a strong interest in the southern European nation. The global tourism market is gravitating towards Cyprus’ shores, and the country is shooting for the stars. The country’s new tourism strategy aims to double tourist arrivals, triple tourist revenue and attract 20 billion euros in new investment to Cyprus by 2030. “It is a very ambitious strategy,” Mavrocostas notes. “It is a strategy that requires everybody involved to play their part, whether it is in the airline business, whether it is Cyprus Tourist Office, or the government as such.”
While Mavrocostas is fully behind the further development of the tourism industry and the country’s economy at large, he ensures investors that the company’s biggest change from the past is its firm focus on profits. “Cyprus Airways is a business,” he emphasises. “It is good to say that we want to develop the Cypriot economy, to develop the Cypriot market and everything.” However, he admits that for the new business, “that is secondary. The investors want a return on their money and we’re going to develop Cyprus Airways as a business.”
The new face of Cyprus Airways not only sends a message to the international community that Cyprus has resurfaced from the crisis, but that its national carrier is going to dominate the skies.