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Easyjet
to
Cyprus?
The
prospect
of low
cost
flights
has
raised
the
hopes of
many
local
ex-pats
following
the
recent
announcement
that
UK-based
budget
airline
EasyJet
is to
purchase
rival GB
Airways.
This
brings
to an
end the
12- year
franchise
agreement
with
British
Airways
which
has
enabled
many
Cyprus-based
Brits to
travel
back to
the UK
from
Paphos
and
Larnaca.
The
deal,
said to
worth
103.5
million
Sterling,
will be
completed
by 31st
January
2008 and
will see EasyJet
claim
24% of
the
total
slots
available
at
Gatwick,
flying
around 8
million
passengers
to 62
destinations
each
year.
A
spokesman
said "GB
Airways
will
continue
to
operate
the
flights
until
31st
March
2008
after
which
all
operations
will be
completed
under
the EasyJet
brand".
Heathrow
routes
are not
part of
the deal
and the
six
Manchester
destinations
are
under
consideration
as
EasyJet
doesn't
currently
operate
from the
airport.
Greek
born Sir
Stelios
Haji-Ioannou
founded
the
airline
in 1995,
and he
and his
family
remain
major
shareholders
in
EasyJet
PLC. He
has
rolled
out the
'easy'
brand
across a
whole
portfolio
of
ventures
including
cruising,
car
hire,
shipping
and
hotels.
The 'no
frills'
airline
business
model
has been
an
amazing
success
with EasyJet
now the
largest
passenger
carrying
UK
airline
and
Stellios
has
stuck
with the
formula
and
resisted
venturing
into the
high
stakes
long
haul
market
and
multi
class
ticketing.
It’s
whole
operation
is based
on a low
cost
'simple
service
model'
using
the
internet
for 95%
of its
bookings,
fast
turn-around
times
for
aircraft
and no
free
catering
onboard.
It is
true,
however,
that the
early
days of
EasyJet
proved
hit and
miss for
passengers
with
flights
being
cancelled,
no
alternative
arrangements
for
those
affected
and a
general
cheap
and not
so
cheerfull
approach.
Much of
the
operational
problem
was down
to
over-use
of the
aircraft
with
turn-around
times
reduced
to 30
minutes
thus
applying
additional
stress
on
ground
crews
and the
aircraft.
Improvements
were
needed
but
there
are only
two
avenues
to go
down,
improve
the
turn-around
times or
increase
the
fleet
size.
The
first
option
was
impossible
so their
only
recourse
was to
increase
the
number
of
aircraft
to
accommodate
demand.
The
purchase
of GB
Airways
sees a
continuation
of this
with an
additional
15
Airbus
A320 and
A321's
to
compliment
the 107
Airbus
A319's EasyJet
already
operate.
What
does all
this
mean for
the
potential
passengers,
Cyprus
and the
future
of
Cyprus
Airways?
GB
Airways
are
currently
one of
the
biggest
operators
between
the UK
and
Cyprus
with
Paphos
in
particular
benefiting
from the
service
with
flights
operating
on an
almost
daily
basis.
Will
EasyJet
continue
with the
routes
to this
degree?
Initial
instinct
are yes,
because
the
route is
profitable.
Stelios
has long
wanted a
conection
with
Cyprus
and has
already
investigated
other
business
possibilities
on the
island.
So while
the
Manchester
flights
are not
guaranteed
the
Gatwick
Paphos
operation
would
appear a
viable
proposition
for the
company.
Maybe,
but a
company
spokesman
has said
'while EasyJet
will
operate
the
routes
in the
months
after
the
handover
they
will not
guarantee
the
future
of any
unprofitable
routes'.
The
overtly
high
operating
costs
imposed
by
Hermes
at
Paphos
and
Larnaca
could
well
cause a
problem
for the
EasyJet
operation.
They
favour a
progressive
landing
charge
agreement
with
many
airports
so if
they
cannot
offer
passengers
a low
cost
fare due
- to
issues
beyond
their
control
- they
could
review
the
routes’
viability.
So will
this
deal
affect
the
future
of
Cyprus
Airways
which
has been
in
absolute
turmoil?
EU
advisers
have
stressed
it has
to
reduce
its cost
base in
order to
survive,
strikes
seem to
be a
common
occurance
and the
government
is
seemingly
incapable
of
steering
the
company
forward.
Successive
senior
executives
have
done
nothing
of note
to turn
the
tide,
the
operation
appear
in free
fall and
would
have
floundered
if not
for a
recent
EU loan
to keep
it
afloat.
The
operating
loss is
being
reduced
but it
is still
nowhere
near
being a
successful
business
so the
introduction
of a
truly
low cost
carrier
into the
arena is
not
exactly
good
news for
the
airline.
It has
long
been
accepted
in
aviation
circles
that
Cyprus
Airways
and BA
have a
gentlemen's
agreement
on
ticket
pricing
and that
fact
prevented EasyJet
flying
to
Cyprus
for many
years.
My
sources
inform
me that
Stelios
was
ready to
complete
an
operational
deal to
Cyprus
in 2001
but
senior
officials
effectively
blocked
the deal
when
they
discovered
the low
price
EasyJet
were
proposing
to
charge
for a
seat.
Stelios
refused
to alter
his
price
structure
insisting
his seat
costs
were not
the
concern
of
Cyprus
Airways
or
anyone
else and
if he
could
operate
at such
a low
cost
then it
was his
perogative
and
nobody
elses
business.
I
believe
the deal
fell
through
because
of this
very
fact,
Cyprus
Airways
and the
Government
knew
they
could
not
compete
on a
seat-for-
seat
basis
with the
pricing
EasyJet
had
projected.
80
pounds
one way?
EasyJet
will be
in
Cyrpus
come
April
2008 and
although
I have
not been
able to
obtain
an
EasyJet
quote
for a
one way
ticket
the
general
consensus
of the
industry
is
between
70 and
80
pounds
provided
the
operating
fees at
the
Islands
two
airports
do not
increased
again.
Should
this
generate
an even
greater
demand
the
likely
scenario
is they
could
look to
increase
flight
operations
during
the
summer
months
if
additional
slots
were
available.
Good
news for
the CTO,
who have
been
courting
low cost
carriers
for
months,
hoteliers
and
restaurant
owners
but not
such
good
news for
Cyprus
Airways
as they
will
effectively
be
priced
out of
the main
UK
market.
Of
course
they
have
additional
routes
but it
is
unlikely
these
can
sustain
the
airline
for long
especially
given
their
current
operational
cost
base.
Aircraft
make
money
when
flying
and with
as many
fare
paying
passengers
as
possible
strapped
in, so
even if
non-UK
routes
are
profitable
the cash
drain on
UK
flights,
which
would be
virtually
empty,
could
seriously
impact
on their
financial
resources.
Maybe
Stelios
would
consider
buying
Cyprus
Airways
as well?
EasyJet
have
always
stuck to
their
business
model
and a
change
in
pricing
strategy
is not
an
option
just
because
it's
Cyprus.
Their
formula
works
and
there is
good
reason
to
believe
demand
for
flights bewteen
the UK
and
Cyprus
will be
extremely
high
during
2008 and
beyond
assuming
a low
unit
cost is
maintained.
The
Cyprus
Tourist
Organisation
should
be
discreetly
smiling
as this
will
bring
Cyprus
into the
marketplace
of a
greater
number
of
British
holiday
makers
and
allow
the
island
to
compete
with the
low cost
destinations
such as
Spain
and
Portugal
and the
Ballieric
Islands.
The
local
community
will be
hoping
EasyJet
continue
with the
route
and
number
of
flights
operating
on a
weekly
basis.
Assuming
that
happens
Cyprus
Airways
can look
forward
to a
dark
uncertain
future
and
probable
demise,
the
timing
of which
depends
on how
long the
government
continues
to throw
good
money at
a
hopeless
situation.
Stelios,
however,
has an
even
bigger
dilema
to
contend
with.
How does
he get
an A320
Airbus
turned
around
and
ready
for take
off at
Paphos
Airport
in 30
minutes?
Suggestions
please!
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