Cyprus government and Hermes Airports signed on Monday an agreement for the the construction of the second phase of the island’s international airports in Larnaca and Paphos and the settlement of disputes regarding the concession agreement of the two airports.

Minister of Transport Alexis Vafeades described the agreement as one that serves the public interest to the greatest extent.

The construction works, which will be carried out in parallel at both airports, will commence at the end of the first quarter of 2025, after the loan agreements between Hermes Airports and the banks that will finance the projects have been completed and signed and after the necessary planning consent has been obtained.

Vafeades and Eleni Kalogirou, Hermes Chief Executive Officer signed the agreement at the Presidential Palace and said that it marks the beginning of a new era for the country’s heavy industry, tourism, local communities and the economy in general.

Both airports cooperate with 55 airlines and serve connections to 38 countries, operating 156 routes.

Regarding passenger traffic, from 6.7 million passengers eighteen years ago, yesterday a new record was set of 12 million passengers for the first time. According to Kalogirou, 2024 is expected to have a total of 12.2 million passengers, an increase of around 82%.

Vafeades appeared optimistic that the trend will be continuous and upward. He also said that the planning is to have an increase of passenger traffic by 50% by 2036.

Both parties said in a statement that the agreement, following months of negotiations, provides for the implementation of a series of projects for Larnaca Airport and Paphos Airport as well as the resolution of disputes that had been pending for a number of years between the parties.

The statement said that the negotiations that took place between the parties resulted in an agreement to extend the duration of the Concession Agreement by 18 months and the payment of compensation of €30m as well as a loan of €20m. from the Republic of Cyprus to the Company, in return for the withdrawal of the Company’s claims and compensation rights due to the operation of the illegal airport at Turkish occupied Tymbou.

For Larnaca Airport, the projects will see an expansion of a total area of approximately 20,000 sq. meters of the terminal building, the construction of new passenger boarding/disembarking gates with the creation of a new wing that will be connected to the main building, as well as an increase in aircraft parking spaces, while the duration of their completion is estimated at 30 months.

Projects will be implemented at Paphos Airport that increase the area of the building by approximately 30% as well as extend the southern parallel taxiway to upgrade the safety and capacity of the runway/taxiway system, while the works are expected to be completed within 27 months from their start.

Vafeades said that the second phase of the project includes infrastructure projects worth 170 million euros for the expansion and renovation of Larnaca Airport by 20% and Paphos Airport by 30%, while it also provides for the waiver by Hermes of claims for compensation.

Larnaka will be able to serve 12.4 million passengers annually, while Paphos will accommodate 5 million.

Cyprus has been divided since 1974, when Turkish troops invaded and occupied 37% of its territory.