ARI set for re-entry as Cyprus completes airport deal

Gavin Lipsith

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The Hermes consortium has reached agreement with the Cypriot government on build-operate-transfer deals for Larnaca and Paphos airports, with Aer Rianta International-Middle East set to take over retail once the financials are settled

Aer Rianta International (ARI) looks set to return to the Cypriot travel-retail market following the signing of build-operate transfer contracts for Larnaca and Paphos airports by the Hermes consortium last week. The consortium—comprising ARI, Vancouver Airport Services, French construction conglomerate Bouygues and two Cypriot companies—is to invest about €500m ($595.2m) in the two airports over the 25-year term.

ARI's Middle East division, headed by John Sutcliffe, will run stores at the airports through a joint venture with Cypriot company Shakolas Group's subsidiary CTC. As reported by RavenFox.com on January 28, the two companies will hold equal shares in the company, with ARI-Middle East taking a lead role in the management of the stores.

The company will move into the airports when a financial deal between the Cypriot government and Hermes has been completed, which could take up to six months. The consortium is hoping to build new terminal buildings at both airports—at Larnaca within four years and at Paphos within three. The upgraded Larnaca airport will eventually have capacity for 9m passengers annually while Paphos will have capacity for 2.7m.

The deal heralds ARI's return to the country after it relinquished its management consultancy role with Cyprus Airways Duty Free Shops in the mid 1990s.