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‘ Air transport liberalization and its impact on the aviation and tourism industries: a case study on Cyprus’. By Sotiroula Liasidou - Lecturer at Americanos College Nicosia – Cyprus ICRAT 2004 ZILINA - SLOVAKIA. PRESENTATION’S STRUCTURE. INTRODUCTION AIMS AIRLINE LIBERALISATION
By Sotiroula Liasidou - Lecturer at Americanos College Nicosia – Cyprus
ZILINA - SLOVAKIA
Regulation – an industry is ruled by the government.
New terminology emerge declaring deregulation/liberalization
Liberalization - ‘frees an industry from the state’s control over prices, entry and exit’
Freedom of entry/exit - Freedom on capacity –Freedom on fares - Freedom of operations - COMPETITION
Transformation of the European Airline’s scene.
Since the 1st of May 2004 Cyprusis member of the EU.
As a consequence, the aviation industry’s landscape has been harmonised under the EU provisions.
In this respect, the views of experts from the private and public sectors in the both aviation and tourism industries of Cyprus are studied through in-depth interviews and questionnaires.
First Package or December 1987
Came into effect in 1997
‘The island of Cyprus is situated at the crossroads of three continents, Europe, Asia and Africa in the Mediterranean sea.’
‘Its history and culture is a living proof of its age-long function as a bridge between civilizations of the Southeast Europe and Middle East’ (PIO,2000)
Flag Carrier (Monopoly - Bilateral Agreements – Protectionism in the markets of Greece and the UK)
New airlines will enter the market
On charter flights.
On seat availability - On fares
On frequencies-On seat demand
On outbound/inbound traffic
On Cyprus Airways
Increase interest on the two illiberal routes Larnaca-London Heathrow / Larnaca-Athens Spata
Renovation of the two airports Larnaca and Paphos (BOT).Regional Hubs
Insignificant Impact (15%)
Saturation of the market
Is adequately covered by the existing airlinesRESEARCH FINDINDS & DISCUSSIONImpact on the Aviation industry
‘European private airlines will enter the Cypriot market as far as there will not be any governmental restriction and the skies of the country will be open to competition’
‘Although for Helios Airways the opportunity is to reschedule its flights to destinations that are considered prosperous for the air traffic for example Larnaca-Athens route’
Operation of the 5th Freedom right
Accessibility of the
More flexible airline services
Increase of the incoming tourism
Decrease of the tourism package price due to lower fares which accounts for 40%-50% in total
Great effect on the SMEs, having as s result the vertical distribution of the revenue
Insignificant effect (15%)
Due to the existence of charter flightsImpact on the Tourism Industry
‘ As a positive impact, is considered the increase of tourism arrivals which leads in an increase of the country’s revenues.’
‘There will be a significant increase in the arrivals from Greece manly because Greek and Cypriot carriers will enter the routes of Larnaca-Athens having as a result the introduction of lower fares andan increase in the arrivals.’
Decrease of the tourism package
Increase of tourism arrivals
Increase of revenue
Increase of independent travellers
Developments of different forms of tourism
Negative impacts (25%)
Increase of mass tourism with socio-cultural problems
Low spending tourism-Bag packersNegative or positive impacts on the tourism industry