Agreement paves way for major upgrades

The Cypriot government and Hermes Airports are set to sign a landmark agreement on Monday, extending the management of Larnaca and Paphos airports until 2033.

The deal resolves longstanding financial disputes and paves the way for significant airport expansion projects aimed at boosting Cyprus’ aviation sector.

Speaking to the Cyprus News Agency (CNA), Transport Minister Alexis Vafeades called the agreement “one of the most important contracts the state has,” emphasising its significance in managing the country’s two primary airports.

Following a year of negotiations, the contract extends the current agreement, set to expire in 2031, by 18 months.

It also ensures Hermes will proceed immediately with the second phase of expansion projects at both airports.

Vafeades recalled that the projects involve “the expansion of the building facilities of the Larnaca and Paphos airport terminals, as well as works on runways that will serve the movement of aircraft.”

He added that “a new building will be created at Larnaca airport, which will also serve low-cost airlines.”

According to the minister, the delivery of the works in Larnaca is set within 30 months from the start of construction, expected in the first quarter of 2025.

The expansion works in Paphos are expected to be completed within 27 months.

“This agreement ensures that Cyprus can proceed with the immediate implementation of much-needed projects to accommodate future passenger traffic, not only for today but also until 2036,” Vafeades said.

He also said that studies on passenger demand have guided the design of these upgrades.

The agreement also resolves a major financial dispute between the state and Hermes Airports. Initially, Hermes sought €430 million in compensation, but this has been reduced to €30 million as part of the deal.

The company has also waived all other claims, including compensation linked to the use of the north’s Ercan (Tymbou) airport.

Government spokesman Konstantinos Letymbiotis described the agreement as “a development of strategic importance” that safeguards national interests while modernising key infrastructure.

“The favourable financial terms of the new agreement ensure economic stability and enhance state revenues through increased commercial activity and infrastructure development,” he posted on X.

Letymbiotis also underlined the wider benefits of the deal. “With the completion of these projects and increased passenger handling capacity, Cyprus strengthens its position as a regional aviation hub,” he said.

“Our connectivity is enhanced, the tourism industry is further developed, and new jobs are created,” he added.

What is more, Letymbiotis also said that “this agreement is tangible proof of the systematic efforts by the government to safeguard the interests of Cyprus while planning strategically for the future.”

Vafeades stressed the importance of the projects in meeting long-term passenger needs. “We believe the benefits for Cyprus are substantial, as these upgrades will help serve not only current passenger traffic but also projected demand until 2036,” he concluded.