ECONOMY

Airline firms are threatening court action against Cyprus

NICOSIA (Reuters) – Charter and budget airlines threatened to take legal action against Cyprus for allowing what they said were excessive airport charges and warned yesterday they could cut back on tourist flights to the island. Eleven members of the International Air Carriers Association (IACA) flying into Cyprus have refused to pay a 44 percent increase in charges imposed from April 1. IACA representatives yesterday said Cypriot airport operator Hermes had warned it could suspend ground-handling services to at least two airlines, effective from 8 p.m. yesterday. Most of them planned to pay the outstanding bill under protest, they said. «Airlines want to pay for what they get,» said Roland Taylor, chairman of the IACA charges committee. «They want decent infrastructure, and Cyprus does not offer this. Cyprus airports are in an appalling condition,» he told a news conference in the Cypriot capital of Nicosia. The Hermes consortium took over the operation of the Larnaca and Paphos airports for a 25-year period in 2006. It has started extensive renovation work at Larnaca, the island’s main airport. The consortium includes Bouygues Batiment International, Aer Rianta International, Vancouver Airport Services and Cyprus’s Iacovou Brothers Construction and Cyprus Trading Corporation. Larnaca is currently a patchwork of prefabricated buildings slapped together when the island lost its key air terminal in Nicosia during conflict with Turkey in 1974. Hermes has said the additional rates are justified because it is making a major investment to revamp both airports, which it said would total -622 million when it signed its contract with the government. The airlines say they have been asked to take on the burden of pre-financing the bill. Taylor said the airlines have refused to pay over and above the rates introduced on April 1 and added, «Individual airlines could be forced to pay under protest, with the initiation of a legal procedure in Cyprus and in Brussels.» He spoke on behalf of airlines including Britain’s Thomas Cook, First Choice Holidays and Monarch Airlines and Germany’s TUI AG. Complaining about «bullying tactics,» Taylor said Cyprus airports were two to three times more expensive than comparable terminals in Spain, Turkey, Greece and Egypt. He said IACA planned to lodge an official complaint against the Cypriot government for failing to adopt EU regulations and open airport ground-handling services to competition.