Банкеръ Weekly


Govt. Cuts Wings of Air Business

With fierce competition and ever increasing prices of kerosene, the rulers loaded with aviation sector new taxes to pay. The Official Gazette published the final texts of the last (for now) amendment to the Civil Aviation Act, which is set to shake Bulgarian aviation market very hard. And last but not least -

this will be reflected in ticket prices.

Currently airports in the country collect money for the planes to land, for their parking, for the use of passenger boarding bridges as well as for passenger servicing. From April next year (after the six-month grace period expires) two more charges will be added to that: the so-called environmental charges and security fee.

The purpose of the introduction of the first charge at first glance seems reasonable - to raise funds to battle noise in the vicinity of civil airports in Bulgaria. This will happen through the establishment of silencing fences, planting of green belts, and the purchase and installation of equipment to ensure that the noise levels are within limits. The problem is that absolutely all airlines are thus placed on the same shelf. Or in other words, owners will be charged the same fee, regardless of differences in environmental performance pf the plane they fly and the engine noise it causes. In this case, what is the incentive for carriers to maintain a modern fleet?

In the rest of Europe, the approach is quite different, than what is adopted in Bulgaria. Around some major airports there are stations that monitor how much noise each airplane produces. When limit is exceeded, this is recorded automatically and the airline has to pay the appropriate penalty, the general secretary of the Bulgarian Airlines Association Yovko Yotsev told the BANKER.

Certainly there are far more grounds in the introduction of security charges. It is also envisaged in the National Schengen Action Plan and ensured that airport security can meet possible terrorist acts. Already in its presentation as an option the Ministry of Transport and Information Technology acknowledged that this will make air carriers pay at airports around 8% more per passenger. Expectations of the Ministry was that after the introduction of this fee the pro rata distributions for landing, passenger handling and parking will be reduced, which in fact did not happen.

The service in practice remains the same, but in practice it will cost more, said Yovko Yotsev.

Yet the airlines will have to bear one more charge - technical light servicing. So far, it has been part of charges for air navigation services. With the amendments to the law, the civil aviation enterprise shall submit to the transport ministry lighting systems and facilities located within the civil airports, and it in turn must within six months transfer them to the airport operators.

More interesting is that with the introduction of the fee, the cost of the air navigation services will not be proportionally reduced.

One should not forget another issue that is to seriously affect all companies operating flights to and from the Old Continent. From 1 January next year their business will be included in the European scheme of carbon trading

and must have a permit for every tonne of carbon emissions they produce.



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