Ryanair is threatening to pull out of Cyprus unless the Cyprus Tourism Organisation (CTO) pays more cash for marketing and the government scraps landing fees at Paphos.
The carrier is prepared to pull Larnaca and Paphos services in October in the latest of a series of withdrawals as it seeks to bolster falling profits.
Governments and state-funded bodies across Europe are struggling to meet Ryanair’s demands.
The airline announced an early withdrawal from Rhodes and Kos in May, reduced services to Morocco in June, and in July axed flights and cut frequencies to Madrid, Barcelona and the Canary Islands.
Manchester will lose flights to Madrid, East Midlands to Barcelona, Liverpool to Gran Canaria, Doncaster to Tenerife and Luton and Edinburgh to Fuerteventura.
Ryanair accused Rhodes and Kos of “reneging” on a promotion deal, Morocco of “refusing to guarantee” cost levels, Spain of raising airport tax and the Canary Islands government of “reneging on its incentive agreement”.
The Cyprus Mail revealed the latest threat this week. The CTO declined to confirm or deny the report, but chairman Alekos Oroundiotis told the Mail: “We are discussing whether to continue co-operation with Ryanair.” The Mail reported Ryanair wants a cash incentive to fly to Larnaca doubled.
The carrier is lobbying for similar deals in Israel and Lebanon and in July announced its first Dutch base, at Maastricht, following a marketing deal with the Netherlands Board of Tourism.
The European Commission is investigating allegations of “state subsidies” to Ryanair that the Association of European Airlines claims amount to hundreds of millions of pounds a year.
Ryanair said it did not comment on rumour or speculation.