Background information

The new incentives scheme has been approved by the Cabinet and announced by the Minister of Transport, Communications and Works, Mr. Yiannis Karousos, and aims to address the consequences emerged with the closing of airports in different sectors of the economy, particularly in tourism, and improve air connectivity of Cyprus with abroad.

Content of measure

The Scheme targets all airline companies aiming to reestablishing the air connection of Cyprus with abroad, revitalizing air passenger traffic and reducing the risk of airline companies, which plan to operate flights in the coming months.

The compensation will be performed on the aircraft occupancy indicator. Based on the indicator, an air route will be eligible to participate in the Scheme only if the airline company estimates that it is in a position to cover at least 40% of the aircraft’s capacity.

The incentive will be paid to the airline companies for a capacity of 41% to 70%, assuming that if the airline company exceeds 70% of aircraft capacity it will have attained normal market conditions. It is estimated that passengers’ traffic will reach 37,000 passengers in June, 196,000 in July, 460,000 in August, 634,000 in September, 693,000 in October, 388,000 in November and 334,000 passengers in December.

Use of measure

The budget of the Incentives Scheme, which is approved by the State Air Commissioner, amounts to €6.3 million. The Scheme will be in force for the next six months; it is addressed to all the airline companies and it is expected that more than 40 companies will express interest to use and participate in the scheme.

Target groups

Workers	Businesses	Citizens
Does not apply to workers	Sector specific set of companies	Does not apply to citizens

Actors and funding

Actors	Funding
National government	National funds

Social partners

Social partners' role in designing the measure and form of involvement:

	Trade unions	Employers' organisations
Role	No involvement	No involvement
Form	Not applicable	Not applicable

Social partners' role in the implementation, monitoring and assessment phase:

• No involvement
• Main level of involvement: N/A

Involvement

Social partners did not participate in the design of the Scheme and are not expected to participate in the implementation and monitoring processes. The Scheme has been designed by the Ministry of Transport, Communication and Works and approved by the Council of Ministers.

Views and reactions

Social partners as well as the political parties see the scheme very positively. They believe that the measure can positively contribute to the restart of the economy, the relaunching of the tourist industry and reduce the negative impact of the pandemic in the economy and in the tourist industry, in particular.

Sectors and occupations

This case is not occupation-specific.

Sources

• 10 June 2020: Incentives scheme for airline companies (www.pio.gov.cy)
• 21 December 2021: Announcment of the Cabinet for issues concerning the Ministry of Transport (www.mcw.gov.cy)