The CEO of the contractor company Scandro Holding Ltd, Charalambos Manolis, recently described the Cyprus-Greece ferry connection as "unsustainable", warning that in case the decisions currently in force are implemented and an extension to the state subsidy is not approved, 2027 may be the last year that routes will be operated.
At the same time, however, it should be noted that the Audit Office not only does not seem to embrace these positions, but even considers that the state subsidy was higher than it should have been, creating disincentives for the company.
In particular, according to the statements of Mr. Manolis to the Cyprus News Agency, the planning failed, since the goal for an autonomous sustainable ferry connection without state funding has not been achieved.
It should be recalled that the Commission had approved, with the launch of the line in 2022, a state subsidy for three years, which was then extended for another three. Essentially, the state, based on the decisions and approvals that have been given, will subsidize the maritime connection until 2027. So, basically, from 2028 onwards, the ferry connection should be autonomously viable, that is, only through the purchase of tickets and the company's revenues and not with the help of the state.
"There is no demand"
According to Mr. Manolis, the reasons behind the failure are related to demand, which as he describes is low, especially if compared to what is happening in Greece.
As he adds, the trips start at the end of May and end at the beginning of September. In fact, he emphasizes that these months do not yet offer substantial income, as only August is recorded as a month with 100% occupancy.
The three months, he emphasizes, are not capable of bringing the necessary revenue, while the ship remains essentially unused for the remaining months, since it cannot operate any other type of routes.
Changes in the EU are a thorn in the side
In addition to the above, the CEO of the company also refers to changes that will bring about price increases, essentially saying that, even if the state subsidy is finally approved and extended, it should be increased.
As he explained, at the end of 2029, the exemption that had been decided for charges related to carbon dioxide emissions will be suspended for coastal ships. A decision that will bring increases. At the same time, another problem faced by this sector is increases in fuel prices, which act as a deterrent to attracting investors.
And other distortions by the Audit Office
What Mr. Manolis mentions does not seem to be the only thorns for the continuation of the off-shore connection, as the latest report of the Audit Office had identified various practices that do not help its viability.
According to the findings of the Audit Office, the incentives given by the state as guaranteed compensation for not selling tickets had exactly the opposite effect. In addition, other distortions had been identified, such as the fact that there were no tickets available, however, the occupancy of the ship reached only 69%.
In addition, a problem seems to have been identified in the booking system, since a traveller can travel alone in a quadruple cabin with a lower price than if he booked a single room, while at the same time there is no "penalty" for cancelling tickets.
In fact, the Audit Office seems to have the opposite view of the company, since as it states in its findings, the amount of the subsidy amounts to close to 93%, considering that it could be lower.
In particular, the company receives as compensation, €5.47 million per year and an additional 6% on ticket sales.
Indicatively, the state for the period 2022-2025 has paid the company a total subsidy of €20.4 million, as follows:
2022: €5.208.952,76
2023: €5.211.755,35
2024: €4.847.054,78
2025: €5.171.317,62
