Cyprus Business Now: wages, natural gas, easyJet, shipping, AI, economic outlook

The final investment decision to develop the Kronos natural gas field in block 6 of Cyprus’ exclusive economic zone offers an opportunity to exploit the area’s remaining gas reserves for the island’s domestic needs, according to energy expert Charles Ellinas. Speaking to the Cyprus News Agency (CNA), Ellinas described the final investment decision by the Eni and TotalEnergies consortium as an important milestone that could pave the way for wider development of Cyprus’ offshore gas resources. “This is certainly a historic development because, after 15 years, we are finally moving towards the process of exporting natural gas,” Ellinas said. He explained that annual production from the Kronos field is expected to reach around five billion cubic metres of natural gas, of which approximately four billion cubic metres will be destined primarily for European markets. “Europe imports around 300 billion cubic metres every year, while we will be sending four billion, so it is a small contribution rather than a solution for Europe,” he said. Aircraft maintenance firm Bird Aviation announced on Wednesday that it has signed a long-term agreement with low-cost airline easyJet to provide scheduled aircraft maintenance services at its facilities in Larnaca, strengthening Cyprus’ position as a regional aviation maintenance hub. The agreement has an initial duration of seven years, with an option to extend it by a further three years, the company stated. According to the announcement, the contract covers two maintenance lines dedicated to scheduled heavy maintenance checks for easyJet’s Airbus A320 family aircraft, with all work to be carried out at Bird Aviation’s facilities in Cyprus. The company said the agreement builds on the long-standing relationship between Bird Aviation and easyJet and establishes a stable framework for the continued provision of heavy maintenance services. It added that the deal will further reinforce the role of Bird Aviation’s Larnaca facilities in supporting easyJet’s fleet maintenance programme over the coming years. Cyprus’ economy is expected to slow down in 2026 as inflation accelerates, according to updated economic projections published on Wednesday by the Economics Research Centre of the University of Cyprus (CypERC), which cited the continuing conflict in the Middle East as a key source of uncertainty. The centre forecasts real gross domestic product (GDP) growth of 2.7 per cent in 2026, down from an estimated 3.8 per cent in 2025, before strengthening to 3.1 per cent in 2027. The latest projections also foresee inflation rising to 3 per cent in 2026, marking a sharp increase from the exceptionally low level recorded in 2025. Compared with the centre’s previous outlook published in April, the 2026 growth forecast has been revised down by 0.2 percentage points, while the projection for 2027 remains unchanged. According to CypERC, the downward revision reflects slower GDP growth during the first quarter of 2026 in both Cyprus and the euro area, together with developments captured by leading economic indicators between April and June. Cyprus’ average monthly earnings increased during the first quarter of 2026, according to provisional figures released by the Cyprus Statistical Service (Cystat) on Wednesday. However, it should be noted that the average salary remains a less representative measure of workers’ earnings than the median, with most employees earning considerably less than the overall average. Specifically, the average gross monthly earnings of employees in Cyprus reached €2,601 in the first quarter of 2026, up from €2,508 in the corresponding quarter of 2025, representing an annual increase of 3.7 per cent. However, while the average salary is influenced by relatively high earners at the top end of the income scale, the earnings distribution indicates that the salary received by the typical worker is lower, with the largest share of employees falling within the €1,500 to €2,999 monthly earnings bracket. After adjusting for seasonal factors, average gross monthly earnings stood at €2,652 during the first quarter of 2026, marking an increase of 0.8 per cent compared with the fourth quarter of 2025. Factorial has evolved into an AI-driven business management platform, recently securing a Series D funding round that values the firm at $2.5 billion. In an interview with the Cyprus Mail, Petros-Emmanouil Panagopoulos discussed the company’s expansion into South-Eastern Europe, including Cyprus. The platform connects human resources, finance, and IT, using an AI agent model that operates within strict user permission structures to ensure security and governance. By automating administrative workflows such as time tracking and expense management, Factorial helps small and medium-sized enterprises reduce operational overhead without replacing existing systems. Key benchmarks for regional success include high customer retention, robust local partnerships, and strong AI adoption rates over the coming months. Cyprus’ newly established Cyprus Business Development Organisation is expected to become operational within the next 12 to 18 months, despite legislation creating the institution having already been approved by parliament. The organisation is intended to become Cyprus’ first dedicated public development finance institution, helping small and medium-sized enterprises (SMEs), startups and self-employed professionals gain access to funding where conventional financing remains difficult to obtain. Following parliament’s approval of the legal framework earlier this month, the next major step will be the appointment of the organisation’s seven-member board of directors, expected next month. The initial board will serve in a transitional capacity for two years while preparations begin for the organisation’s full operation, including the development of financing programmes, lending tools and other financial instruments. Rather than functioning as another commercial lender, the organisation is intended to address financing gaps in the Cypriot market, particularly for businesses that struggle to secure funding because of limited collateral, shorter operating histories or higher perceived risks. State Aid Control Commissioner Stella Michaelidou has ruled that the grant scheme for financing the operation of the Cyprus AI Factory Antenna Pharos-CY is compatible with European Union state aid rules, clearing the way for the implementation of the artificial intelligence initiative. According to an announcement issued on Thursday, the Deputy Ministry of Research, Innovation and Digital Policy will be responsible for implementing and managing the scheme. The announcement explained that small and medium-sized enterprises (SMEs) will be the principal beneficiaries of the aid. It added that large companies, along with other beneficiaries such as semi-government organisations and government departments, will receive support either as de minimis aid or as assistance that does not constitute state aid under European Union law. The next two years will be decisive for the future of Cyprus’ energy strategy as the country prepares to transition from gas discoveries to production, Energy Minister Michael Damianos said on Wednesday. Speaking at the World Congress of Overseas Cypriots in Nicosia, Damianos said Cyprus had reached “a pivotal point” in its energy journey, with developments in the eastern Mediterranean presenting both significant challenges and new opportunities. “In an environment of heightened geopolitical uncertainty, energy has emerged as a key factor for economic development, regional cooperation and strategic security,” he said, adding that Cyprus continues to pursue a “consistent and multidimensional” energy policy aimed at reducing energy costs, strengthening security of supply and making the most of its domestic resources. Damianos highlighted the growing importance of the 3+1 energy partnership between Cyprus, Greece, Israel and the United States, describing it as an increasingly important platform for political and technical cooperation. He said the framework now extends beyond hydrocarbons to renewable energy, electricity interconnections, new technologies and energy innovation. The Cyprus Shipping Association (CSA) has welcomed the revision of the European framework for the green transition in shipping, saying it represents a significant opportunity for Cyprus to accelerate investment in modern port infrastructure and further strengthen the competitiveness of its maritime sector. In a statement, the CSA said it is closely following developments surrounding the proposed revision of the European Union Emissions Trading System (EU ETS), while participating actively, through FONASBA and ECASBA, in the wider European dialogue on the green transition of shipping. The association noted that the European Commission’s proposals are moving in a positive direction, as they foresee channelling a greater share of ETS revenues back into shipping through investment in clean fuels, electric power supply to ships at berth (cold ironing), modern port infrastructure and other decarbonisation technologies. At the same time, the Cyprus Shipping Association stressed that the proposals retain important support tools for states with strong maritime sectors, creating additional funding possibilities for the green transition. The Bank of Cyprus is expected to deliver another strong quarter, with analysts forecasting robust profitability and the potential for generous shareholder distributions, as Greek and Cypriot banks continue to benefit from credit expansion, resilient interest income and rising fee revenue. According to a report by Alpha Finance-AXIA, the findings of which were shared by Newmoney, investor attention has already shifted beyond second-quarter earnings towards the possibility of banks upgrading their full-year guidance and announcing interim distributions to shareholders. The brokerage maintained a buy recommendation for the Bank of Cyprus, assigning a target price of €11.60 per share. It also reiterated buy recommendations for Eurobank with a target price of €5.30, National Bank of Greece with a target price of €17.50, and Piraeus Bank with a target price of €10.60. For Optima Bank, Alpha Finance-AXIA maintained a hold recommendation with a target price of €8.50. No recommendation or target price was published for Alpha Bank because the stock remains under research restrictions, with the report’s forecasts instead based on the market consensus. Demetra Holdings Plc announced on Wednesday that it repurchased more of its own shares on the Cyprus Stock Exchange (CSE) following prior shareholder approval. The Cypriot investment firm said it conducted the buyback of 3,815 own shares at a price of €1.48 per share during the trading session of July 28, 2026. The repurchase was carried out through the Cyprus Investment & Securities Corp Ltd (CISCO) on the regulated market of the Cyprus Stock Exchange (CSE).