The future of Cyprus' air connectivity is at the center of intense discussions at European and national level, following the issue highlighted by Filenews regarding the possibility of cuts in state aid to airlines.
The publication, which recorded Nicosia's strong concerns and the Cypriot side's request for special treatment of island states, was followed by an immediate reaction from the Ministry of Transport, which was quick to clarify that the country's connectivity remains strong and secured.
Today, the Commission clarifies the timing of the decisions, analyzes its philosophy around free competition, while Commission sources provide important background information specifically on the status of Cypriot airports.
We quote the written statement of the representative of the European Commission:
"Following the public consultation on the draft revised State aid guidelines for aviation, which closed on 11 June, the Commission is currently examining the comments received. The adoption of the revised guidelines is scheduled for the first quarter of 2027.
As far as start-up aid is concerned, our experience shows that this tool has been used very little since 2014, while our supporting study showed that airlines have opened many new routes since 2014 without the use of start-up aids.
A reflection is ongoing on whether start-up payments to airlines could be an effective tool to promote the connectivity of EU regions, including remote areas and islands. The Commission considers that in today's fully liberalised air transport market, air carriers should bear their own operating costs and bear the risk of opening up new, potentially profitable routes.
However, for specific routes that are critical for public service obligations (PSOs), State aid rules already provide flexibility to avoid the risk of disruption of connections and allow for the establishment of urgent public services to maintain these routes.
In general, the Commission pays particular attention to the connectivity needs of islands within the EU."
Information from the Commission: What applies to Cyprus
In addition to the official statement, competent sources of the European Commission provided in the context of information (on background) specific clarifications that directly concern Cyprus, partially allaying concerns about a direct blow to Cypriot air transport:
Zero use of start-up aid: According to the Commission, Cyprus has not made use of the "start-up aid" tool since the introduction of the existing aviation guidelines, i.e. since 2014.
• There have been no regular state aid decisions concerning the two Cypriot airports of Larnaca and Paphos, with the sole exception of the emergency support measures approved to address the effects of the COVID-19 pandemic.
• The Commission recalls that Cyprus has already successfully established a Public Service Obligation (PSO) regime for the vital Larnaca – Brussels – Larnaca route. As it is clarified, the establishment of these special routes is governed by the European Regulation 1008/2008 and this possibility will remain fully in force after the adoption of the new, revised guidelines in 2027.
Nicosia's six proposals
The issue brought to light by Filenews concerns the Commission's attempt to limit the flow of public money to airlines, asking air carriers to bear the full cost of their activities. However, for Cyprus, air connectivity is not a luxury, but the functional equivalent of the road and rail networks that connect the rest of Europe.
The Republic of Cyprus actively participated in the public consultation by the deadline of 11 June by submitting through the Ministry of Transport six concrete and documented proposals aimed at protecting its interests. For its part, the Ministry of Transport appears reassuring, clarifying that the existing incentives granted in cooperation with the airport operator (Hermes) are based on purely commercial market conditions (private investment) and, therefore, do not constitute state aid and are not threatened by the new European framework.
The six proposals of Cyprus
-Our airports should be treated as infrastructures of territorial cohesion
-The European Commission explicitly recognises Cyprus as a 'remote region'. The Government asks for this to be reflected even more clearly: that our airports are an infrastructure of national cohesion, like the highways in other countries. The benefit: greater security that Larnaca and Paphos airports will be able to receive state support when there is a real need.
-Maintain the possibility of incentives for new air routes
-Cyprus suggests that the incentives for new routes for island states be maintained in a targeted way: for winter routes and for new tourism markets. The benefit: more off-season flights, diversification of the tourist flow, less dependence on specific markets.
-Fair treatment for the size of our country
-An airport of nine million passengers in a country of nine hundred thousand inhabitants is not the same as an airport of a large European city. The Government is asking for a "passengers per capita" criterion to be added. The benefit: Larnaca and Paphos airports will be evaluated more fairly, taking into account that they serve international tourism in proportionally large numbers in relation to the country's population.
More time to adapt to green goals
Cyprus is asking for an extension of the transitional aid period until 2035 for island states, so that airports can adapt to the new green requirements (sustainable fuels, electricity). The benefit: environmental goals are achieved without a sharp increase in costs that could be passed on to passengers.
No artificial "proximity" with airports in other countries
The new rules examine, among other things, whether neighbouring airports are competing with each other. For Cyprus, which does not have a road or rail connection with another Member State, this makes no sense. The Government requests an explicit exemption. The benefit: less bureaucracy and faster assessment of support requests at European level.
Flight support for Cypriot residents
The Government is asking for the subsidy of tickets for students, workers and professionals moving to and from Europe to be facilitated. The benefit: cheaper tickets for those who need to travel regularly.
