ECONOMY

Bulgaria Air flying closer to its sell-off

SOFIA – Bulgaria’s government has approved a plan to sell flag carrier Bulgaria Air before liberalizing its skies for EU airlines later this year, the transport minister said yesterday. The country will offer up to 99.99 percent of the small but profitable airline in one of a string of deals its Socialist-led government hopes will bring investment and boost competitiveness before planned European Union entry next year. «We believe that the privatization should happen quickly because Bulgaria is going to join the EU soon,» Transport Minister Peter Mutafchiev told reporters. «I hope that by June the deal will be sealed. We expect serious interest.» The EU «Open Skies» agreement allows air carriers to fly between EU member states without regulation. Bulgaria aims to join the accord by the end of the year. «Bulgaria will soon be part of the common EU skies and we should hurry with the privatization to prepare the company for the competition,» Mutafchiev noted. The sell-off plan must be approved by Parliament. Under the strategy, the government will sell 99.99 percent of Bulgaria Air’s capital to a strategic or financial investor from Bulgaria, the European Union or the EU economic area, Mutafchiev said. The investor will also be asked to increase Bulgaria Air’s capital up to 30.16 million levs from current 10.16 million, while Sofia will retain a golden share to protect national interests, he added. Privatization Agency Executive Director Todor Nikolov said the sale would happen in a two-stage tender and authorities would focus mainly on the price and investment plan offered by prospective investors. Mutafchiev said that so far the Bulgarian air carrier Hemus Air and a strategic European investor have expressed interest in the sale. He did not elaborate. The privatization of Bulgaria Air has hit a number of false starts, most recently with a plan by the previous centrist administration of ex-king Simeon Saxe-Coburg to sell the company by mid-2005 that did not take place. Scandinavia’s SAS, Austrian Airlines and two private Italian carriers – Volare and Air One – expressed interest in the sale then. The company was formed after the collapse of Balkan Airlines in 2002. It is Bulgaria’s biggest airline and accounts for around a third of its air travel market. It flies to 18 European destinations with a fleet of eight leased Boeings.