Банкеръ Weekly


Passions around Sofia Airport Go Haywire

Three and a half million passengers a year, 550 flights per week, or a total of 28,600 per year. This is the traffic statistics for the largest Bulgarian airport - Sofia. Competition is fierce and it is between three operators - the Swiss company Swissport holds about 30% of the Bulgarian market through its subsidiary company, the Greek Goldair Handling has about 20 percent also through its subsidiary here and has the leading share is still in the hands of the operator Sofia Airport JSC, with the fact that nobody handles the airplanes of Bulgaria Air which provides these services to it on its own. Fight in this situation is taking place for each customer, and the funds are used, sometimes on the verge of good business ethics.

Less than three months ago Swissport announced that it has filed a complaint with the Commission for Protection of Competition against their Greek competitors because of unfair trade and dumping pricing practices. The Swiss have complained against Sofia Airport JSC on suspicion of dominant market position of the Bulgarian operator. With some delay, due to the political situation in the country during the week representatives of Goldair Handling commented accusations made against them.

I'm surprised by the actions of Swissport both against us and against the Sofia Airport JSC. This just shows how nervous they are. This is weird because we work together also on the Greek and the Cypriot market, where competition is even bigger, but we have had no such problems there. They say that our prices are low, but who knows better than us what we can offer to your customers. If you want to become a millionaire from the airport with 3.5 million passengers this is just not going to happen, Dimitris Papamihail, CEO of Goldair Handling Bulgaria, said for the BANKER. He also explained that several times he has been invited to the Commission for Protection of Competition, where they presented and explained their tariffs and contracts with their customers, and pointed out they were optimistic about the final decision of the antimonopoly our body.

Obviously, there's nothing for Swissport to worry about. Between November 2010 and when it entered the Bulgarian market until now, Goldair Handling Bulgaria has secured for itself the service of seven airlines. Among them, along with smaller players like Easyjet and Cyprus Airways, are Qatar Airways, Turkish Airlines and Aeroflot. At the same time, according to Papamihail, a few days ago Swissport has lost another key client - the largest low-cost carrier in Central and Eastern Europe - Wizz Air, who has preferred the service to Sofia Airport SAD. The positions of the Swiss company on the Bulgarian capital's airport are mainly due to their handling of Lufthansa. But this year several major airlines are expected to announce tenders for ground handling companies, since the contracts of Air France and Alitalia with Sofia Airport and the one of Lufthansa with Swissport are going to expire. This will surely cause additional stress.

Against this background, the hopes of Swissport that the Directorate General of the Civil Aviation Administration (CAA) will revoke the licence of Goldair Handling Bulgaria because of poor financial results seems more and more an illusion. It is true that to get a license for terrestrial operator a company must satisfy the condition of financial stability. And in the last three years the Greek company was in the red figures operating at a loss in: 2010 it amounted a loss of EUR500 thousand, in 2011 this came to 1.1 million, and in 2012 to about 400 thousand.

The negative financial result is quite normal when investing - says on this occasion Dimitris Papamihail. We've invested 5 million to buy equipment for ground servicing of aircraft and current investments in Bulgaria come to a total of 10 million. In Sofia we employ about 95 people and in Burgas - another 45 people. According to him, the company has a contract with Piraeus Bank and is no longer subsidized by its parent company.


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