ECONOMY

Low-cost airlines land in Bulgaria

SOFIA (AFP) – The touchdown of Wizz Air aircraft in Bulgaria’s capital city last week marked the arrival of the first low-cost airline in the country, spelling an imminent shake-up for the local travel industry. Wizz Air, the No. 1 low-cost carrier in central and eastern Europe, obtained a government license in June and launched its first flights from Sofia to Budapest in Hungary last week. Hailing the company’s expansion, chief executive of Wizz, Jozsef Varadi, said that in two years the airline would be the biggest in the country, a pledge that struck fear into its two Bulgarian competitors, the state-owned Bulgaria Air and Hemus Air. «We call on the government to revise its decision for liberalizing the air transport market by letting in foreign low-cost companies ahead of the country’s accession to the European Union in 2007,» said Hemus Air Chief Executive Dimitar Pavlov. He added, «The priority of the government should be to protect the Bulgarian air carriers and not to promote foreign ones.» Konstantin Taskov, a director of state- owned Bulgaria Air, warned that the group would suffer a 20-30 percent decline in customers to Budapest after the start of Wizz Air flights. Bulgaria Air has a leading position in Bulgaria with a 34 percent market share, followed by Germany’s Lufthansa, Austrian Airlines, Air France and Alitalia, Jordan Karamalakov of the International Air Transport Association (IATA) told AFP. Karamalakov predicted that Wizz would shake up the market and challenge the market dominance of the established operators. Passengers in Bulgaria had totaled 203,000 by the end of August, valuing the market at 77 million euros ($92.8 million), and demand is expected to double to 115 million euros by the end of 2005, IATA data show. Until last week, Bulgaria was the only country in the region that remained closed to low-cost air carriers, despite a growing market and the interest of a number of airlines. Explaining the decision to grant a license to Wizz, the Bulgarian Transport Ministry said last week that «it could no longer fend off the air transport market if the country wants to join the European Union.» The Transport Ministry also announced that it had issued a license to a second low-cost carrier last week, Slovakia-based Sky Europe, which intends to fly four times a week to Bratislava.