Eurofound's EU PolicyWatch collates information on the responses of government and social partners to the COVID-19 crisis, the war in Ukraine, rising inflation, as well as gathering examples of company practices aimed at mitigating the social and economic impacts.
Factsheet for measure CY-2022-45/3025 – measures in Cyprus
Country | Cyprus , applies nationwide |
Time period | Temporary, 01 November 2022 – 31 July 2027 |
Context | War in Ukraine |
Type | Other initiatives or policies |
Category |
Ensuring business continuity and support for essential services
– Other |
Author | Loucas Antoniou (INEK) and Eurofound |
Measure added | 31 January 2023 (updated 21 March 2023) |
The new incentives schemes proposed by the Ministers of Finance and Transport, Communications and Works were approved by the Cabinet in November 2022. The new schemes aim to address the consequences emerged with the war in Ukraine and to develop Cyprus’ air connectivity, the development of new routes, the maintenance of existing routes and the increase of passenger traffic. The new incentive plan is a continuation of the relevant trade agreements implemented for the period 2012-2022, with the participation of Hermes Airports and the Ministry of Transport, Communications and Works under relevant trade agreements.
Beneficiaries are all qualified airlines operating routes in Cyprus. The budget available for the implementation of the scheme is €165 million. The new plan covers the following basic schemes and grants:
The government contributes 49% towards the cost and Hermes Airports 51%, percentages which are reduced to 27% and 73%, respectively, since the operator will continue to pay the concession fee of 32.38%. It is expected that the implementation of the new incentives’ schemes will bring about a 52% increase in the number of passengers from approximately 9 million in 2022 to 13.7 million in 2027.
Workers | Businesses | Citizens |
---|---|---|
Does not apply to workers |
Sector specific set of companies
|
Does not apply to citizens |
Actors | Funding |
---|---|
National government
Company / Companies |
National funds
|
Social partners' role in designing the measure and form of involvement:
Trade unions | Employers' organisations | |
---|---|---|
Role | No involvement as case not in social partner domain | No involvement |
Form | Not applicable | Not applicable |
Social partners' role in the implementation, monitoring and assessment phase:
The grant scheme emerged as a joint proposal of the Ministers of Finance and Transport, Communications and Work and in agreement with the airports’ operator, Hermes Airports Ltd upon the expiration of the latest corresponding incentives’ plan for airline companies. Social partner or political party have not been invited to participate in the consultation process. Similarly, social partners and political parties have no involvement in the implementation of the grant. The implementation body is the airports’ operator, Hermes Airports Ltd.
The criticisms of the employers’ organizations and business leaders on the earlier decision of the government to suspend the initial incentives’ plan pressed the government to reconsider and the pressure led to the implementation of the grant scheme. Employers’ organizations and the Cyprus tourist sector – the Cyprus Hotel Association (PASYXE) and the Association of Cyprus Tourist Enterprises (STEK), in specific, welcomed the final decision of Cabinet; they said the incentives’ scheme is pivotal for the future of the Cypriot tourist sector, especially with the various challenges that the sector will continue to face in the coming years.
This case is sector-specific (only private sector)
Economic area | Sector (NACE level 2) |
---|---|
H - Transportation And Storage | H51 Air transport |
This case is not occupation-specific.
Citation
Eurofound (2023), New incentives schemes for airline companies, measure CY-2022-45/3025 (measures in Cyprus), EU PolicyWatch, Dublin, https://static.eurofound.europa.eu/covid19db/cases/CY-2022-45_3025.html
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30 January 2023
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