Bulgarian Airlines Are in for Mass Bankruptcies

Business | December 10, 2020, Thursday // 16:34
Bulgaria: Bulgarian Airlines Are in for Mass Bankruptcies pexels.com

Financial grants compensating for part of the lost revenues would greatly support the Bulgarian airline industry. Airlines are in dire need of additional support, Svetoslav Stanulov, Chairman of the Management Board of the Association of Bulgarian Aviation Companies, told BNR. The association‘s members are about 80% of the Bulgarian companies and maintenance bases.

European airlines' revenues compared to last year were down by about 73%.  For Bulgarian airlines, revenues from scheduled flights decreased by about 65%.

"Charter carriers revenues have dropped overwhelmingly. On an annual basis, maybe by 85-90%. They do not have any flights in the last 4-5 months. Zero," Stanlov pointed out, clarifying that this does not allow companies to cover their routine costs.

"All financial reserves have already been used. Airlines have additional specific costs that cannot be saved," Stanlov said.

Bulgarian airlines employ about 4,000–4,500 people. So far, very small proportion of them have been made redundant because they are highly qualified staff.

"The high costs are related to the maintenance of machines operational condition. Airlines pay for parking, for maintenance, which is mandatory even when planes are on the ground. In addition, they pay 40% of the salaries under the 60/40 measure plus the cost of pilots training," Stanulov added.

"It is very possible that mass bankruptcies will start", warned Svetoslav Stanlov. In his words, it is no coincidence that there are financial grants in Europe and the US. "As an example, 20-30% of the decreased revenues are subsidized by the state. We don't hope for it anymore, but without such help it's extremely difficult for all of us to cope at the moment," the expert said.

 

 

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