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We need to learn to live and travel with Covid-19

Author: Eleni Kaloyirou, CEO of Hermes Airports

Published: 03 Mar 2021

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In a recent interview with Gold Magazine published on 17 January 2021, Eleni Kaloyirou, CEO of Hermes Airports, the company that manages the two international airports of Cyprus, said that she expects the travel and tourism industry to respond positively to the severe disruption caused by Covid-19 and remains optimistic that the sector will gradually recover and thrive once more.

How would you describe your experience of the lockdown period at the country’s airports? What were your priorities at the time?

Our priorities from the start of the pandemic have been the protection and safety of our staff and passengers and ensuring business continuity.

It is important to stress that even during the lockdown period our airports were not closed as they form a critical part of the country’s infrastructure. The airports had to stay operational as they offer essential services, maintaining connectivity with the rest of the world and serving crucial flights for the transportation of cargo (incl. medical supplies) and the repatriation of people.

What this meant for us was that in a period with virtually no revenues we continued to incur costs. It was essential to reduce our expenses to the extent possible to safeguard our liquidity and ensure our business continuity. Even though in an airport a large percentage of expenses is not variable and therefore hard to reduce, with effective cooperation between all airport stakeholders we were able to manage this difficult period.

Do you believe that COVID-19 will have a permanent impact on the aviation and airports sector? Airport management companies in other countries are already looking at alternative sources of revenue (theme parks, etc.). Do you foresee Hermes Airports being forced to take a similar approach?

There is no doubt that the ongoing Covid-19 pandemic is having a massive impact on people’s lives, our societies, and on the global economy, with air transport and the wider travel and tourism sector being amongst the hardest hit.

The air transport sector has proven in the past that it can respond successfully to the changes and challenges which arise from time to time and I believe the same will happen now. Especially for an island country like Cyprus with a large tourism sector demand for air travel will continue to exist and will gradually revive. We acknowledge that it may take some time to return to past levels of traffic, but I am confident we will do so.

Opportunities can arise in a crisis, not only through alternative sources of revenue but through a variation in existing ones. A good example is Wizz Air’s decision to establish a new base in Larnaka with three aircraft as of July 2020. That was a long-term goal of ours and the opportunity to make it happen actually came during the crisis.

Hermes Aiport 2

Are there any new developments to report regarding the use of the old airport?

A large part of the old airport area is in fact utilised. Since 2019 approximately 5,000sqm of the old terminal building house a University that offers distance learning courses. Moreover, the Skylink executive aviation terminal, courier, and cargo handling companies as well as three aviation flying schools are also situated at the old airport areas.

What is your forecast for passenger traffic in 2021? Do you think there will ever be a return to the record numbers of 2019?

During 2021 the Covid-19 pandemic will continue to play the key role in shaping recovery of passengers. Determining factors include the epidemiological situation in Cyprus and our source markets combined with timing of vaccination rollouts. In addition to the epidemiological factors, we will be impacted by the timing of government actions and relaxation of measures such as quarantining and testing, plus economic conditions (disposable incomes) impacting ability to travel.

What we know is that there is a lot of pent-up demand for travel and airlines are very keen to restart their operations as soon as restrictions are removed and conditions allow.

Based on the experience gained last year, in 2021 we need to move from crisis management to risk management and thus learn to live and travel with the virus. If the aviation sector’s proposal of testing travellers originating from high-risk areas, as opposed to applying quarantines or outright restrictions on travel, is embraced it will enable recovery in air traffic whilst reducing transmission risk both in local communities as well as during air travel.

Although it could be three to four years before we return to 2019 passenger levels, the expectation is that we will do so and that we will continue growing thereafter.

You will have heard the criticism that Cyprus’ air connectivity is inadequate but is this true? How would you describe the picture and how can it be improved?

Given the size of Cyprus and our distance from Europe I wouldn’t say that our connectivity is inadequate, but admit that it can be improved, and this is what we are working towards.

Just before the pandemic emerged, Cyprus was directly connected to 120 destinations in 40 countries via 70 airlines. The crisis has affected the aviation industry on a global level and therefore, Cyprus’ connectivity could not have remained intact. However, since day one, we are in constant communication with the airlines aiming to get them to fully restore their flight schedules. These efforts are paying off and airlines, both ones that flew to Cyprus before the pandemic as well as new ones, are waiting for conditions to allow so that they can gradually restore their operations to both our airports and in some cases also add new routes.

The establishment of a base by Wizz Air in Cyprus will certainly help to improve the situation, especially once current travel restrictions are lifted. A good example is the introduction of the Paris Beauvais route at both Larnaka and Pafos airports which will provide a direct connection with France, something we have been working on for a number of years.

Hermes Airport

Given that Cyprus cannot benefit from traditional markets this year due to the pandemic, what other markets do you think we should be targeting in order to increase tourist arrivals?

One of the main priorities of our long-term aviation development strategy, is the diversification of traffic to reduce the dependence on traditional markets through the growth of secondary markets. This past summer for example, we have seen growth in markets such as Austria and Switzerland amongst others, however, due to the epidemiological situation, it wasn’t possible to capitalise on this opportunity. Efforts in this direction will continue with the gradual recovery of traffic.

Diversification into different markets is not only about countries but about types of travellers as well. Based on travel trends we are observing, individual travel looks set to increase in importance and this is a market segment we are pursuing as airports and are encouraging the tourism sector to explore further. Other trends involve younger passengers and people looking for more genuine experiences when they travel which are also being advanced.

What are the key skills and qualities that a successful business leader needs?

The aim of any business leader is to achieve the best possible results for their organization. To achieve that, they must first have a vision of where they want to lead their organization. The vision will guide the creation of a strategy, with specific and measurable targets, which then needs to be communicated to everyone in the organization so that it can be applied and yield the desired results.

It is important for a leader to be able to communicate their vision in a compelling manner to their team and to lead in an exemplary manner, inspiring everyone to work effectively towards achieving their goals. A leader needs to be flexible and able to adapt to changing situations in order to achieve the long-term strategy of the organization.

Finally, it is very important for a leader to have values on which to base their actions, the most important of which is integrity.

*The views expressed are the author’s and not ICAEW