Balkan faces Arab boycott

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Acquisition of a 75% stake in Balkan Bulgarian by Israeli investors has run into problems after Arab countries threatened to boycott the carrier.

Lebanon and Syria say that Balkan flights will be banned from landing in Beirut and Damascus because the airline is owned by Israeli interests.

Knafaim - Arkia, the holding company of privately owned Israeli airline Arkia, and the Zeevi Group have bought 75% of Balkan's shares for $150,000. They have committed to restructure the airline, with an investment of $100 million, over the next 10 years.

The Israeli group says Balkan will continue to operate as Bulgaria's national airline. It refused to comment on the ban. Sources in the group, however, say the ban is worrying and they are trying to assess its impact on operations.

The Israeli Arkia-Zeevi group plans to take over Balkan management on 15 July.