Hermes enters Cyprus contract talks as Alterra withdraws

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Aer Rianta could step in as duty-free operator under a lucrative Cyprus airport contract

The Hermes consortium that includes Aer Rianta, French conglomerate Bouygues, YVR Airport Services and a number of Cypriot companies now looks the likely winner of a $400m contract to build and operate two new airports in Cyprus, after preferred bidder Alterra pulled out of talks on the project. As reported on TRW this week, the Alterra group, which includes Bechtel, Barclays Private Equity and Singapore Changi Airport, failed to renew its financial bid by the July 5 deadline.

Hermes came second in the initial bid last year to construct and operate new facilities at Larnaca and Paphos under a 25-year contract.

Aer Rianta International-Middle East (ARI-ME) is likely to manage the duty-free business should Hermes be appointed to the contract. ARI-ME was central to improving the fortunes of the duty-free operations in Larnaca and Paphos under its consultancy agreement with Cyprus Airways Duty Free Shops, transforming the business into a $100m a year operation.