Банкеръ Weekly



By June 15, the Ministry of Transport will have fixed a date on which the European Common Aviation Area (ECAA) agreement will become valid. Minister Petar Mutafchiev was among those who signed it in Luxembourg last week. According to the international treaty, Bulgaria has to liberalize its air market for foreign carriers. Quotas under the currently operating bilateral agreements will be removed and each air company from the community will be allowed to fly to whatever airports it wants and is able to. It means that larger carriers will be allowed to launch planes on some of the good destinations which are now used by Bulgaria Air. Besides, when the agreement becomes valid companies will not need to obtain exploitation permission. On the other hand, however, aviation safety requirements will become stricter and carriers will have to meet certain criteria in order to fly on a route, the ministry explained.
When ECAA enters into force, Bulgaria will get access to 400 airports in 35 European countries with over 500 million consumers. Bulgarian air companies will be able to fly without limits to any airport in countries that have signed the document. Along with Bulgaria, Romania, Bosnia and Herzegovina, Croatia, Iceland, Macedonia, Norway and the UN interim administration in Kosovo signed the treaty, too.
The agreement will lead to a growing number of carriers who fly to Bulgaria. In turn, intensified competition will result in lower prices and bigger traffic. Wizz Air and Sky Europe will probably be followed by other low-cost airlines on the Bulgarian market as they act rather aggressively. However, that will raise a lot of questions in front of the Bulgarian air companies, experts warn and insist that the treaty become valid in Bulgaria in 2007.
The deadline in question is not related to the country's potential membership in the European Union, but with the privatisation of Bulgaria Air which should be completed no later than the end of 2006. In the meantime, Russian media informed that Russia's Illushin Finance is a possible buyer of the Bulgarian national air carrier. Inquiries in the Privatisation Agency were also made by the small Bulgarian company Hemus Air, Austrian Airlines, and the US-Greek consortium York Capital Management and Olympic Investors, the Russian Vzglyad paper announced. Until now, these companies have not presented any documents and have not declared officially their intention to participate in the Bulgaria Air privatisation, the Privatisation Agency PR Veneta Nacheva told Reuters.
A 36% stake in Illushin Finance is held by the Russian tycoon and member of the Duma Alexander Lebedev through his NRK corporation which currently holds USD2BN assets. Through the corporation Mr. Lebedev also owns 30% of Aeroflot, stakes in Gazprom and RAO Electricity Energy Systems.
A source from NRK confirmed to Vzglyad that the company was interested in Bulgaria Air, particularly since Alexander Lebedev was planning to sell his 30% stake in Aeroflot within a year. He wants to get rid of his shares in the Russian carrier because of the incessant disagreements with its managers provoked by his insistence that Aeroflot has mainly Russian planes in its park.
The 49-year-old Lebedev is a typical modern-day Russian oligarch. He holds an engineering and technical degree and, like the President Vladimir Putin, has been a KGB officer in its foreign intelligence department, where he retired as a lieutenant-colonel in 1992. It is at that time that his business went headlong and combined with a political career on a later stage.
At present, Lebedev is a member of the pro-president United Russia fraction in the Duma, leader of the group of Russian MPs in PACE, member of the parliamentary group for Ukranian-Russian friendship. A few days ago, together with the last Soviet president Mihail Gorbachov, Lebedev acquired 49% of the Russian newspaper Novaya Gazeta and declared it would be a pragmatic, modern and high-circulation edition.
The Illushin Finance company was established in 1999 at the initiative of the Illushin aviation complex. Its main task is to commit operating and financial leasing of Russian-made aviation equipment. That is why, if NRK buys Bulgaria Air, Bulgaria's national carrier will most probably fill its park with machines produced in Russia.

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