Mediterranean island airports witness post-pandemic bounce back - part one: Cyprus
Regional recovery from the COVID-19 pandemic continues to be of concern - especially in the case of Asia Pacific.
But as a CAPA - Centre for Aviation report pointed out right at the start of it, it is small island airports throughout the world that stood to lose the most from the unprecedented event, on account of their exposure to critical supply issues and the loss of tourism revenue.
Malta and Cyprus are two small independent island states in the Mediterranean Sea, with a combined population of less than two million and where tourism was a substantial part of their GDP.
The impact could have been crippling, but both survived, and both tourist numbers and passengers are close to the 2019 level - or have surpassed it.
The question now is where do they go from here? Both have had 'hub' ambitions in the past, and today Cyprus is probably a little better placed to achieve that to any degree.
But for either to have a chance, they really need stronger national airlines - as they previously had.
This is part one of a two-part report.
- Cyprus and Malta have recovered from the COVID-19 pandemic better than they might have expected.
- The impact of the pandemic was always likely to be more keenly felt on small island states.
- Both islands - and especially Cyprus - suffered from stringent pandemic regulations.
- Both Malta and Cyprus are heavily dependent on the tourism sector, and they also have strategic importance.
- Cyprus is looking to potential new North American and Asian routes.
Impact of the pandemic was always likely to be more keenly felt on small island states
In Apr-2020, right at the start of the COVID-19 pandemic, CAPA - Centre for Aviation published a two-part report on how it would likely impact on the world's small island states, particularly remote ones, for which air travel is an absolute necessity. (Links to those reports can be found at the end of the second part of this analysis).
That impact was always likely to be felt more keenly on those islands for numerous reasons, including the difficulty of providing critical supplies when air services were minimised, and the effect the pandemic would have on tourism, which is often a mainstay of the economy.
Cyprus and Malta both heavily dependent on the tourism sector
Two of the countries examined straight away were Cyprus and Malta, located in the eastern and central Mediterranean Sea respectively, and both heavily dependent on tourism as a significant part of GDP (8% in Cyprus in 2019 and almost 13% in Malta).
Locator map for Malta and Cyprus
Both countries, with a combined population of just 1.8 million (Cyprus 1.26 million and 540,000 on Malta), are members of the European Union - two of only three island states in that political block, along with the Republic of Ireland.
(Cyprus has been a divided island since 1974, when the northern part - known now as the 'Turkish Republic of Northern Cyprus' - was invaded and occupied by Türkiye, and it is only recognised as a state by Türkiye. Only the Greek southern part was included in the 2020 CAPA - Centre for Aviation reports, and also here).
Both carry strategic importance
Both of these tiny countries, the fifth and eighth smallest in the EU, punch well above their weight where strategic importance is concerned.
Because of its proximity to the Middle East, Cyprus is a key British (and ergo - NATO) military base and strategic listening post, and is currently involved in relief efforts in Gaza as a staging point for supplies.
Malta meanwhile, although not a NATO member, has a similarly strategic significance, located in the middle of the Mediterranean between Europe and North Africa, northeast of Tunis and midway between Palermo and Tripoli.
At the time a British Crown Colony, it was the scene of the Siege of Malta in World War 2, which lasted from Jun-1940 to Nov-1942 as the Nazi Germany/Italian axis attempted unsuccessfully to wrest control of it from the Allies - earning the entire nation the award of the George Cross, the highest award bestowed by the British government for non-operational gallantry for "the heroism and devotion of its people".
Although Malta ceased to be a UK crown colony in 1964, and Cyprus was granted independence from UK administration in 1960, the long-established connections were the bedrock in both countries of the tourism business that followed.
Both islands - and especially Cyprus - suffered from stringent pandemic regulations
Cyprus in particular, which reported 661,000 COVID-19 cases - half its population - was afflicted by a very heavy-handed travel restriction and lockdown regime during the COVID-19 pandemic, one of the strictest in Europe. Malta had 121,000 cases, just over one fifth of its population.
In Cyprus entry restrictions from the two largest visitor markets - the UK and Russia - were kept for a long time, despite pressure from businesses after it was discovered that most of the new cases were from travellers.
In Malta there were two main waves, the second of which coming in Sep-2020, but the country was the first in the EU to prescribe the vaccines to adults, and was able to ride the pandemic better than most countries.
We now consider Cyprus more closely.
Larnaca is Cyprus' larger airport
Being a larger island, Cyprus has two commercial airports, the larger one at Larnaca to the east, and an airport at Paphos to the west. Both are involved, to a degree, in handling military forces traffic.
Limassol, the country's second largest city, lies on the coastal road between them, while the capital and largest city, Nicosia, lies to the north of Larnaca. (The Turkish part of the island is served by Ercan Airport, which lies close to Nicosia).
Map of Cyprus
The complex Hermes Airports' concession has a mercurial presence
There is private sector involvement in the management of the two main airports in the form of Hermes Airports.
Although the state wholly owns them, they are operated under a 25-year concession by what is a consortium of disparate companies with financial, operational and construction experience, as detailed here: French construction group Bouygues Bâtiment International (22%); French infrastructure group Egis Projects (20%); Cyprus Trading Corporation (11.34%) ; Hellenic Mining (11.33%); Vantage Airports (previously YVRAS) (11%); Aer Rianta International (11%); Iacovou Brothers (5.665%); Charilaos Apostolides (.665%); Aéroport Nice Côte d' Azur Chambre de Commerce et d'Industrie (2%).
Cyprus a wealthy country
Cyprus having, like Malta, extensive shipping and financial sector activities as well as tourism, in 2023 the island nation had the highest per capita GDP in Southern Europe (USD54,000).
With 20% growth in 2023, tourism has recovered to within 4% of the 2019 figure, with 3,845,000 visitors.
Cyprus: annual tourism, visitor numbers/growth, 2019-2024YTD
Most foreign visitors from the UK
The origins of tourist visitors weighs heavily on one market, with 33.9% of them from the UK in 2023, which was a slight increase on 2019.
But in 2008 almost 52% were from the UK, so there is a swing, and latterly it has been in favour of Israel, which now provides the second highest ratio of visitors.
Between them, at Larnaca International Airport Glafcos Clerides and Paphos International Airport there will be 55 airlines providing services from Cyprus airports to 150 destinations in 38 countries during the northern summer 2024 season.
From Larnaca airlines will operate services to 96 destinations, and from Paphos they will operate to 56 destinations.
The airports operator looks to potential North American and Asian routes
Hermes Airports recorded an increase of 12% year-on-year in passenger traffic during the 2023/24 winter season, and aims to maintain growth in air connectivity and traffic levels with a desire to establishing connectivity with North America or Asia, "a goal achievable through collective engagement with stakeholders, both locally and internationally".
The passenger traffic chart for the main Larnaca Airport (LCA) for the period 2019-2024 shows an almost return to pre-pandemic levels, falling short by only 1.9%.
Larnaca International Airport Glafcos Clerides: annual traffic, passenger numbers/growth, 2019-2024YTD
Its growth continued into 2024: in 1Q2024 it was +11%.
A broad swathe of airlines...
There is not a dominance by any one or two airlines at LCA as is the case in Malta. A reconstituted (since 2016) Cyprus Airways, which once held a powerful position in the movement of foreign travellers to the country, no longer counts in the top six airlines at LCA by capacity, which is headed by Wizz Air on only 13% of capacity. (However, many of Wizz Air's services are seasonal, operating only the northern summer months, so that capacity ratio will change in the summer months).
In total, 93% of capacity is on foreign airlines, which is an even higher level than is the case in Malta, and the government would surely want that position to change in favour of local ones.
...with a network that provides more of a 'mini' hub capability
Larnaca has a little more in the way of hub capability in that it handles flights from West and East Europe, the Middle East, and West Asia, but it cannot be compared with the large neighbouring hubs in the Middle East or Turkey.
Larnaca International Airport Glafcos Clerides: network map for the week commencing 05-May-2024
Just over a third of seats at LCA are on LCCs, with charter still playing a role (7.7%), but with most capacity on full service and regional airlines (55%).
LCA is also well utilised, with 24/7 operations and arriving and departing capacity in each hour on most days of the week.
A big upgrade to the airport took place in 2006 as a direct result of Hermes Airports taking over its management, and included a new terminal building, but construction activities since then have been piecemeal (apart from a runway extension to almost 3,000m).