“We hope there will be concrete action this time, otherwise the charter season is lost and the aviation business is on its knees. The state of the aviation sector in our country continues to be critical.” This was stated by Mr. Todor Ivandjikov – Chairman of the of the Bulgarian Aviation Industry Association (BAIA) after yesterday’s meeting with the Minister of Transport Georgi Todorov.
The organisation again appealed for financial support for the sector through another letter sent to the government. It was submitted on Friday, June 4 and addressed, in addition to the Minister of Transport, to the Prime Minister Stefan Yanev, the Deputy Prime Minister for the management of EU funds Atanas Pekanov and the Minister of Tourism Stela Baltova. In the letter, BAIA demands an urgent grant to the aviation sector in Bulgaria in the amount of 20% of the turnover for 2018 and 2019.
It is also said that according to Eurocontrol, in 2020 the decline in passenger flights on scheduled routes is 65%. Domestic airlines, which operate 70-80% of the charter programmes to Bulgaria, have not made any revenue in this period. These circumstances put our country’s aviation industry in a situation of inability to continue to exist without an emergency programme to survive these unprecedented force majeure conditions.
At the same time, EU Member States have provided grants to their airlines for 2020 alone as follows. According to a report, Austria has supported its aviation with EUR 150 million, Belgium with EUR 290 million, Romania with EUR 62 million and Greece with EUR 120 million. The heavy damage to airlines is reflected in the number of passengers carried. The trend for recovery in the coming years will be an extremely slow process, given that the forecasts for recovery at this stage are for 2024-2025. In this period charter programmes remain uncertain and without a clear forecast.
BAIA also points out that the charter business carried out by Bulgarian airlines is essential for our country as the revenues from it remain in the Bulgarian economy and are a very important prerequisite for the stabilization and development of tourism in Bulgaria, which accounts for 12% of GDP.
After the meeting yesterday, Mr. Ivandjikov also said that the options for industry aid were again discussed, some with a June 30 deadline for which there is no time and others September 30, 2021. He added:
“We have asked for a working group to be set up between the Department for Transport and the Department of Finance, together with the business community, to work out the options for grants and rewards. There was a verbal agreement, but I didn’t hear specifics on who would lead the process and how this would be organized. Hopefully there will be concrete action this time because the charter season is lost and businesses are on their knees, and with aid options approved by Europe we need to take advantage and help the businesses in the industry that are most affected. Let us hope we have been heard and properly understood because we will not give up trying to get the state to put aviation as a priority in transports especially in this ongoing global crisis.”
In the letter to the government, BAIA makes the following proposals:
– A grant to the sector of 20% of 2018 and 2019 turnover to address inter-company indebtedness. In this regard, part of the proceeds from the initial payment of the Sofia airport concession contract, approximately BGN 120 million, should be directed to the airline industry companies to ensure flight safety, maintain the airworthiness of aircraft and flight crew and repay accumulated liabilities formed since the beginning of the pandemic until mid-2021.
– 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 the airline industry companies in the EU recovery plan from Covid 19 and sustainable development and grant of up to 50% of the total turnover for both years 2018 and 2019, to be used for the recovery of the sector within the next three years.
– Adoption of the European Commission guidelines on regulatory capital adequacy requirements for airlines and groundhandlers.
– State contribution of part of the increased contributions to the Professional Pension Fund of the aircrew (12% of the insurance fund)
– Exemption of Bulgarian companies from paying fees to the CAA at a tariff for a period of at least 3 years.
– Opportunity for interest free loans pending receipt of Recovery Plan grant from Covid 19 Sustainable Development.