Bulgaria in second bid for airline investment

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Bulgaria Air is to be privatised in two stages and a foreign airline is likely to be chosen to acquire a strategic holding in the state-owned carrier under plans drawn up by the Bulgarian government, writes Igor Salinger.

The strategic partner will be selected on the basis of price, proposed investment programme, reputation and experience. Consortia wishing to bid must be at least 51% controlled by an aviation company with more than €100 million ($123 million) of annual revenue during the past three years. Financial investors can bid if they manage over €200 million of assets.

The proposed sale "will hopefully be approved by parliament by the end of September", says Yordan Mirchev, chair of the Bulgarian parliamentary transport commission.

The new plan aims to prevent a repeat of the disastrous attempt to privatise former flag carrier Balkan Bulgarian Airlines, which was declared bankrupt at the end of 2002 following its sale to the Israeli Zeevi group three years before for $150,000, says Mirchev.

Bulgaria Air was established as the successor to Balkan in December 2002 and operates seven Boeing 737-300s and one 737-500 on scheduled and charter services within Europe and to the Middle East. The airline reported an after-tax profit of 1.5 million levs ($940,000) in 2003.

Meanwhile, European low-cost carriers are expected to enter the Bulgarian market next year. Hungary's low-cost airline Wizz Air may launch flights to Bulgaria and Romania after the two countries sign an "open skies" agreement. Sky Europe and Ryanair intend to serve Varna and Burgas on Bulgaria's Black Sea coast, says Bulgarian civil aviation administration head Kalin Barzov.