Ryanair to submit non-binding offer for Cyprus Airways

Ryanair will submit a non-binding offer for Cyprus Airways on Friday as Europe's No. 1 discount carrier seeks to extend its footprint eastward to an island increasingly popular with Russian and Israeli visitors.

Ryanair has emerged as one of a “handful” of interested bidders for the state-owned business after chief executive officer Michael O’Leary met with Cyprus’s transport minister last week.

“We’ve had a positive meeting on both sides and we think there is a good business there to take over,” Rynair chief marketing officer Kenny Jacobs said in an interview.

“It gives us access to a really interesting part of Europe that’s going to grow and that part of Europe is easily connected to the Middle East, which is also interesting.”

A more detailed data-collection process will begin if the Cypriot government approves the Ryanair offer, and it could take a “couple of months” to prepare a binding proposal, Mr Jacobs said.

A takeover would be only the second in Ryanair’s 29-year history following the 2003 purchase of low-cost carrier Buzz, with Mr O’Leary preferring to enter markets after the demise of local airlines rather than bail them out.

Some 382,000 people visited Cyprus in July, up 5.7 per cent from 2013, according to the Mediterranean island’s statistical authority. Israeli arrivals surged 63 percent and Russian visits rose 21 per cent.

Tourism accounts for more than a fifth of the economy, according to the World Travel and Tourism Council.

Founded in 1947, Cyprus Airways operates scheduled flights to about a dozen destinations in Europe and the Middle East using a fleet of six Airbus A320 aircraft, according to its website.

The carrier attracts about 1.3 million passengers annually and is almost 94 per cent government owned.

Ryanair boosted its order book to 180 Boeing 737 jets in April and is targeting new markets in a push to increase passenger numbers to 110 million people by 2019.

The Irish carrier has also pursued television commercials and a website overhaul in a push to tame its no-frills image and lure new customer groups such as business passengers.

O’Leary’s only deal beyond the €20.1 million purchase of Buzz from KLM Royal Dutch Airlines was a minority investment in Irish rival Aer Lingus .

European antitrust authorities blocked a full takeover and Britain’s Competition Commission has ruled that the stake must be sold down.

Ryanair and UK rival EasyJet are expanding as network operators including Deutsche Lufthansa and British Airways parent International Consolidated Airlines seek to re- invent their short-haul units along low-cost lines.

Bloomberg