Alan Murray is answering questions about all the recent developments at Monarch with relation to their Cyprus route and any new initiatives they have planned.
Joint marketing initiatives (between the public and private sectors), joint sharing of brochure costs, reduced fees and better service at the airports. Look at similar initiatives to that afforded to tour operators in Egypt through some form of hotel fund to assist tour operators and ensure they continue to take commitments with a range of load factor incentives for IT tour operators. Other than that it’s difficult to see what else they can do which is within their control. Many in the industry, locally and abroad, are suggesting Cyprus is an expensive destination. Although appreciating the Euro effect, Cyprus is considered a more expensive destination compared to nearby competitors within Greece and of course Turkey and Egypt (all around similar flying times). Possibly Cyprus’ product is better than some other destinations, but certainly from our experience the airport infrastructure is poorer and yet the costs paid for it and lack of consideration of what airlines are saying, will be a determent to the Island as passengers will have (as have airlines with costs and delays) had to bear the brunt of this. They will undoubtedly tell others of their experiences, which again might make potential customers vote with their feet.We are adding Birmingham-Larnaca to our scheduled route network effective summer 2009, thus ensuring that all our major fixed bases have scheduled operations to Larnaca (Gatwick, Luton, Birmingham and Manchester). Gatwick operates 5 times per week, Luton daily, Manchester 6 times per week and Birmingham twice weekly.On our charter network we have added two additional flights to Paphos (one Gatwick and one Manchester) and maintained our charter presence on Larnaca (only two flights). We now operate over 122,000 seats each summer to Paphos on charter, however have found it increasingly difficult to build a charter network in the winter and therefore the destination remains a summer only destination for us, something we would clearly like to address. It is however fair to say that Paphos is not doing as well and we are seeing a particular softness on the revenue side. This is possibly explained by the Euro factor, however there is a more noticeable softening on Cyprus than shall we say on Greece.How was your performance to Cyprus in 2008 and how does this compare to previous years?2008 was difficult insofar as having to control the costs due to the high increases in fuel costs. However, during both 2007 and 2008 we saw far greater cost increases in Cyprus as a result of the control of the airport infrastructure being handed over to Hermes, who then implemented huge cost rises which we were simply unable to recover. This coupled with lack of resources, manifesting itself in poor service to customers undoubtedly left passengers feeling as if a sub-standard product was being offered. Delay to the terminal opening in Larnaca will not help this situation, nor will the airport infrastructure cost base in comparison with elsewhere in the Eastern Med. How will the economic crisis affect Cyprus’ tourism industry?Thus far we are seeing the economic impact being to 1) traditional booking patterns becoming much later and 2) a definite softening in yield. As passengers seek cheap alternatives, they leave the decision on if and when they travel to the last minute (probably due to uncertainty about their own employment prospects more than anything else). This also will have a profound affect (as will the FX rate) on the numbers of people buying second homes in the sun. This will in turn affect the Cyprus market considerably along with its prospects for growth. A secondary issue is that with those who had more affluence, they are seeing very little return on their savings, which may have previously been used to fund second/third holidays. Lastly those who relied on their pension growth and had more freedom to travel will also be feeling the effects on their income. All in all, this is leading to a definite impact and particularly on more discretionary second and third holidays.What advice can you offer to combat these affects?
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