Knowing full well that her economy is heavily dependent on tourism, Cyprus has taken new steps to reduce the cost of flights in and out of the country. Government officials reached a deal with Hermes Airports, as reported by Bloomberg, to offer airline incentives aimed at getting more tourists to the island. The government's Minister of Communications and Works confirmed the report through an official announcement.

During a press conference with reporters in Nicosia, Minister Efthymios Flourentzos said, “The incentives aim at boosting tourist numbers mainly from new markets through reduced passenger fees. We intend to put these incentives immediately into force. Passenger fees are considered too high, mainly by low-cost airlines.”

According to the agreement airlines can take advantage of lower fees in one of three ways. The first is to include Cyprus as part of an expansion plan for new destinations; the second option is available to airlines who concentrate on coming to Cyprus during the slow winter months. The third, and by far most attractive, provides special incentives to airlines who agree to fly in and out of Cyprus for a minimum of five years. If all goes as planned, the increased passenger traffic should allow airlines to cut their fees at the retail level.

Hermes Airports' Nicolas Shacolas believes the rate cuts could significantly boost arrivals by as much as 20%. He envisions "more than 400,000” new arrivals in 2012, with perhaps more significant increases in the following years. If that became reality it would be a great boost for a still struggling Cypriot economy. Cyprus tourist officials have been working feverishly over the last year to boost the nation's tourism sector as a means of bringing some economic stability.

According to government numbers, Cyprus saw more than 2.3 million visitors through the first 11 months of 2011. That's an increase of more than 200,000 over the same period last year. If the new airline fees can indeed bring the anticipated number of arrivals as expressed by Mr. Shacolas, it could provide a much-needed economic shot in the arm.

As a Mediterranean destination, Cyprus has a lot to offer European travellers looking for a holiday with plenty of warmth and sunshine. While it's true that Indian Ocean and destinations are among some of the favourites with Europeans, Cyprus offers a comparable environment at a lower price and closer to home.Cyprus luxury hotels can certainly compete with anything else found in the Caribbean or the Indian Ocean, and the spectacular Mediterranean environment is unlike anything you can find anywhere else. Furthermore, the unique Cypriot culture defies explanation. It is a place so rich in heritage, tradition, and history that one must visit Cyprus to truly understand Cyprus.

According to tourism officials the rate cuts are in effect immediately. That means tourists could begin seeing cheaper flight options as early as the start of next year. Europeans thinking of a possible holiday to Cyprus this spring or summer now have all the more reason to do so.

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