Cyprus airline 'clinches Hong Kong investment to launch flights'

A Cyprus-based budget airline said Monday it has secured investment from a wealthy Hong Kong group that brings it closer to launching flights and replacing the island's shuttered national carrier.

"This broadens our investor base to include both Cypriot and Chinese capital and is a major boost to our plan to launch operations this year as Cyprus' new flag carrier," said Gregory Diacou, chairman of the carrier Cobalt.

Diacou said it was the first major foreign investment in Cyprus since the island secured a 10-billion-euro (at the time $13 billion) bailout to save its economy and failing banks in March 2013.

The amount was not disclosed and neither was the name of the Hong Kong company, which it said was on the Fortune 500 list of the world's top firms.

The government confirmed last month that Cobalt was one of three Cypriot firms that had applied for an air operator’s certificate (AOC) from civil aviation authorities.

Cobalt's chief executive Andrew Pyne said the January 2015 closure of bankrupt national carrier Cyprus Airways had created "a vacuum in terms of an airline that puts Cyprus first and promotes the island as its home".

He said the airline would establish Cyprus as a major aviation hub, capitalising on its geographical location, and aimed to create 500 local jobs over the next five years.

Cobalt plans to launch with links between Larnaca and destinations across Western Europe, Russia, the Middle East and Africa.

It later aims to add long-haul flights to China, South Africa and the United States.

The Mediterranean holiday island's top tourist markets are the UK followed by Russia. Around 70 airlines fly to Cyprus, where tourism revenues account for around 12 percent of GDP.

Tourist arrivals hit a 14-year high in 2015, reaching 2.65 million.