CobaltAir to launch end-Q1 2016

Financial Mirror (Cyprus) - - FRONT PAGE -

CobaltAir, the new Cyprus-based air­line that plans to launch full com­mer­cial oper­a­tions by the end of the first quar­ter of next year, has al­ready rented premises, hired 22 staff and leased an Air­bus A320, with more air­craft ex­pected to be added to the fleet.

The low-cost air­line’s CEO, An­drew Pyne, with long in­ter­na­tional avi­a­tion ex­pe­ri­ence, said that the ini­tial mo­ti­va­tion to start the com­pany was be­cause of the vac­uum cre­ated by the demise of for­mer na­tional car­rier, Cyprus Air­ways (CAIR).

“It’s bad for the econ­omy when the coun­try does not have a flag car­rier,” he said in an in­ter­view, adding that since he and his as­so­ciates ar­rived on the is­land at the end of Jan­uary, their in­ten­tion was to de­velop Cyprus as a strong hub.

“We have ini­tially leased a 180-seat A320 and plan to ex­pand the fleet to in­clude A330s to take ad­van­tage of com­mon­al­ity, pur­su­ing a num­ber of air­craft ini­tially on lease, while fu­ture pur­chases also de­pend on the com­ple­tion of the cap­i­tal rais­ing, presently un­der­way,” he said.

Of the staff hired so far, 90% are lo­cal re­cruits, some from ex-Cyprus Air­ways, but hired on new terms.

By the time of the launch at the end of Q1, staff num­bers should rise to 100 with a route net­work of 5-6 des­ti­na­tions, added Chief Com­mer­cial Of­fi­cer Mike Hay­den.

“Se­cur­ing the Air Op­er­a­tor Cer­tifi­cate (AOC) is al­most 90% com­plete, with the main out­stand­ing is­sues be­ing the in­spec­tion of the fa­cil­i­ties and ap­prov­ing the flights,” said CEO Pyne.

The fleet ex­pan­sion de­pends on the de­vel­op­ment of mar­kets and in a year af­ter the launch, by the end of 1Q 2017, the plan is to have a net­work of 8-hour flight routes, reach­ing out as far as Asia and Africa.

For now, the com­pany, New Age Air­lines Hold­ings Ltd., is based in Ni­cosia, but plans are to move to Lar­naca.

“Af­ter the demise of CAIR, fares have gone up and con­sumers de­serve bet­ter deals,” Pyne said, adding that they will be mar­ket­ing ‘value for money’.

De­spite the high costs in­volved in op­er­at­ing the lu­cra­tive Cyprus-Rus­sia route, he said that “we understand the high cost struc­ture of the Rus­sian routes, but we also plan to de­velop the off-sea­son mar­ket, with the pro­mo­tion of an­tiq­ui­ties, in­land re­sorts and the moun­tains, “not just bucket-and-spade hol­i­days.”

Cyprus needs more ag­gres­sive pro­mo­tion, in co­op­er­a­tion with the Cyprus Tourism Or­gan­i­sa­tion, to tar­get “tra­di­tional” mar­kets such as Ger­many, Scan­di­navia and Ire­land, to name a few.

As re­gards air­line al­liances, CEO Pyne said th­ese “tend to un­der­mine the low-cost model, as the cost is stag­ger­ing in terms of sys­tem in­te­gra­tion, up to 30 mln eu­ros, adding that the plan is to de­velop re­la­tion­ships and “in­traair­line” co­op­er­a­tion.

CCO Hay­den said: “I pre­fer to get my loy­alty awards up­front, with a good deal on the fare,” adding that Cobalt, that takes its name from the deep-blue colour iden­ti­fied with the Mediter­ranean, will also be look­ing to serve the busi­ness traf­fic.

“It is un­likely that our fares will be at the low­est end of the low-cost op­er­a­tors, but it will be within the rules of a level play­ing field,” Pyne said, ex­plain­ing that air­lines such as Ryanair get Cyprus gov­ern­ment sub­si­dies to op­er­ate cer­tain nec­es­sary routes.

The ‘fifth free­dom traf­fic rights’ al­lo­cated to other air­lines has not given out all of CAIR’s rights to other car­ri­ers, making it more suit­able for th­ese to be al­lo­cated to a gen­uinely Cypriot car­rier such as Cobalt.

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