Zeevi pulls plug on grounded Balkan Bulgarian

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Balkan Bulgarian Airlines ceased operations last week after majority owner Zeevi group of Israel stopped funding the carrier. It is not clear whether Balkan will be able to resume operations, although Zeevi says efforts are being made to allow it to do so.

Balkan was grounded on 14 February, two days after Zeevi filed a $230 million suit against the Bulgarian Government, claiming it had been misled before its decision to buy 75% of the airline. Zeevi acquired the stake in 1999 after agreeing to take on $30million of Balkan's debts and provide $100 million funding within five years, but sources suggest the government tried to modify these terms to include the transfer of $120 million of debt, while raising taxes and fees paid by Balkan.

Zeevi and the government recently held talks which broke down, leading to the filing of the suit at the international arbitration court in Paris. Balkan operates three Boeing 737-300s and two -500s, plus a single Tupolev Tu-154, two ATR 42s, two Antonov An-24s and four An-12 cargo aircraft.