Around 60 million leva could be redirected to help Bulgarian airlines. These funds are available at Sofia Airport EAD after the change of the airport’s concessionaire and can be disposed of by the Ministry of Transport. This became clear after a meeting held on 28 June between representatives of the Bulgarian Aviation Industry Association (ABAI) and the caretaker Minister of Finance Assen Vassilev. It was the first time that concrete measures were discussed to improve the extremely unenviable situation of the aviation sector in the country as a result of the coronary crisis.
It should be recalled that for several months, BAIA members have repeatedly sounded the alarm about a collapse in the aviation industry, which threatens to bankrupt some of the companies in the sector amid ongoing uncertainty about the 2021 summer season and after the completely failed Summer’2020.
A number of letters were sent to the government with dozens of appeals for financial assistance. The association has demanded the provision of an emergency grant to the aviation sector of 20% of turnover for 2018 and 2019. And more:
– Expanding funding opportunities for airlines from operational programmes, e.g. OP “Innovation and Competitiveness”, OP “Small and Medium Enterprises Initiative”, OP “Human Resources Development”, COSME Programme, “Support for medium-sized enterprises to overcome the economic impact of the COVID-19 pandemic”;
– Inclusion of airline industry companies in the EU COVID-19 Recovery and Sustainable Development Plan and a grant of up to 50% of the total turnover for the two years 2018 and 2019 to be used for the recovery of the sector within the next three years;
– The State to bear part of the increase in contributions to the Professional Aircrew Pension Fund (12% of insurable income);
– Exemption of Bulgarian companies from paying fees to the CAA under Tariff 5 for a period of at least 3 years;
– Possibility of interest-free loans until the grant under the Covid-19 Recovery Plan is received.
Some of the above suggestions were not taken into account at the meeting. However, the Ministry proposed that BAIA be included in the National Council for Tripartite Cooperation of Social Partners to set the framework for the next 6 months.
BAIA described the meeting at the Ministry of Finance as fruitful. The President of the organization Mr. Todor Ivandjikov commented:
“We definitely saw a willingness from the Minister to help us. The other thing was that instead of letters, there is now a constructive dialogue. Suggestions were also made on how to implement this assistance to the aviation sector. There is a proposal to give credits to the airlines and we have been told that in case of a problem, we should again approach the Ministry.”
The BAIA once again stressed the importance of the charter business for our country: according to the representatives of the organization it is extremely important because the revenues from it remain in the Bulgarian economy and are a prerequisite for the stabilization of tourism, which in turn provides 12% of the GDP of the country. However, the situation in Bulgarian and world aviation has not improved. According to Eurocontrol, as of 27.06.2021, air traffic over Europe is at a level of only 53% compared to the same period of 2019. This result does not give the majority of aviation companies the opportunity to support themselves, and even less – to cover the debts accumulated over the past 15 months. The expected slow recovery of traffic and the unclear prospects in the short and medium term due to new coronavirus variants and the low vaccination coverage of the Bulgarian population aggravate the situation even further.
At the same time, the membership of BAIA is increasing. Only in the past week, 3 new representatives have joined the organization, namely MRO company, a ground handling company, and a club offering extreme sports as services, including air sports. This indicates two things: firstly, that the situation in the aviation sector continues to be seriously deteriorated and secondly, that companies need cooperation with each other, dialogue, clear problem-setting and, above all, constructive feedback to the ministries responsible for the industry.