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500,000 £8 FLIGHTS

Ryanair, the world’s favourite airline, today (4 August) announced that it will open a new twice-weekly service from London Stansted to Plovdiv in Bulgaria which will commence on 2 November with fares from £32.99 one way inclusive of taxes.

Ryanair celebrated this new routes by releasing 500,000 £8 seats for travel on Tuesdays, Wednesdays and Thursdays in September. These “all in” low fares will be available on over 500 of Ryanair’s European routes but must be booked on www.ryanair.com before midnight on Thursday, 5 Aug.

Ryanair’s Laura McCormack said:

“Ryanair is delighted to announce our first Bulgarian route from London Stansted to Plovdiv. This new service will operate twice-weekly on Tuesdays and Saturdays with fares from only £32.99 one way inclusive of taxes which will go on sale tomorrow on www.ryanair.com. Plovdiv is Bulgaria’s second largest city with a rich and varied history dating back 8000 years. Plovdiv makes a great city break destination and is also within easy access of the ski resorts of Bansko and

Only Ryanair sells Europe’s lowest fares with a no fuel surcharge guarantee. In addition to our lowest fares we also deliver Europe’s No1 on-time performance across over 1,100 routes. Passengers can book our £8 seats for travel on over 500 European destinations in September. These seats can only be booked until midnight on Thursday (5 August) and are sure to be snapped up fast so we urge passengers to book them on www.ryanair.com before they sell out. Fares to Plovdiv start from £32.99 one way inclusive of taxes.”

Mortgage loans for foreign nationals and Bulgarians working abroad are back on the Bulgarian banking market in response to reviving demand, banks and credit consultants said.

Tihomir Toshev, executive director of credit consultant Credit Center, said interest in this type of loans was zero at the time when the crisis was at its worst, forcing lenders to withdraw such offers.

Other consultants say that banks are imposing new requirements, such as targeting borrowers from specific nationalities and financing the purchases of a property whose construction the lender has backed.

UniCredit Bulbank said on July 13 2010 that it had launched mortgages for foreigners and Bulgarians working abroad, who could choose from among a list of 22 projects financed by the bank.

Source: Dnevnik.bg

Despite flying “in bulk” to more than 150 destinations throughout Europe, low-cost airline Ryanair is very picky in choosing which airports it uses. Among the list of conditions that must be met, the most important is that the use of the airport must come cheaply.

This is one of the main reasons why the largest no-frills airline in the world is yet to launch flights to Bulgaria. But all of that could change now that several municipalities in Plovdiv region – Hissarya, Assenovgrad and Rodopi – have joined forces to draw more tourists by exploiting the proximity of Plovdiv Airport.

In 2009, the Bulgarian Government completed work on a large passenger terminal in the country’s second-largest city, investing more than 40 million leva in the construction, which for now stands empty.

Until April, the only regular arrivals to Plovdiv were by Russian airline S7 out of Siberia, which will resume flights in September.

Cargo flights are out of the question because Plovdiv Airport has no cargo terminal, so the only option is to attract passenger flights by low-cost airlines, since the traditional carriers operate flights to the not-so-distant Sofia.

To draw the interest of big-name players like Ryanair, the Cabinet halved the fees for Plovdiv Airport starting May 1 until May 1 2012. The airport fee is thus half that charged by Sofia Airport and and the passenger processing fee is three times lower.

There is still no contract with the Irish low-cost carrier, but people familiar with the situation say that there is an unspoken competition to win Ryanair’s business. On May 26, the airline’s officials met representatives of all civilian airports in Bulgaria and a technical review of the Plovdiv Airport is said to have been scheduled.

ECCENTRIC: Chief executive of Ryanair Michael O’Leary poses for photographers during a news conference in Vienna in November 2007.

I want to fly

The three municipalities set up on May 20 a fund for the development of Plovdiv Airport.

“The goal of this non-profit organisation is to raise funds and help the creation of permanent flights to Plovdiv Airport, as well as advertise the municipalities,” the executive director of Plovdiv Airport Doichin Angelov said.

Plovdiv city hall is expected to join the initiative and 20 more municipalities are in talks to do the same. The fund’s decisions are taken by majority vote of its board, which includes all mayors, while Plovdiv Airport has been retained as a consultant.

The money would be raised from tourist taxes, which hotels have to pay to local authorities. Additionally, a small local tax would be levied on residents of municipalities that have joined the fund. For the three municipalities now on board, that would generate an estimated 56 000 leva a year.

“It is an opportunity for joint action if any given municipality cannot manage on its own,” the governor of Plovdiv region, Ivan Totev, said. “The fund is a mechanism to share risk, a practice common in the West, but not used a lot in Bulgaria,” he said.

The example that the local authorities in Plovdiv hope to emulate is that of Girona Airport in Catalonia, about 92km from Barcelona, which Ryanair picked as one of its destinations in 2000.

“After the creation of a similar fund by Catalonian municipalities, an airport that had no passengers managed to build a passenger flow of eight million people,” Totev said. “Such a practice can be used in other fields, Plovdiv Airport is just one separate case.”

The first step is to help attract airlines to use Plovdiv Airport, which is now underused, followed by the establishment of regular bus lines between individual municipalities and the airport.

After the local authorities announced their plans, the immediate follow-up question was whether the money would be treated as state aid. The fears are that the airline could be compensated under certain conditions, such as flights not being sold out.

“There can be no talk of state aid because the fund was not set up to help a particular airline,” Totev said.

The proposed solution is that airlines would sign separate contracts with Plovdiv Airport and the fund, the second one being optional and carrying certain obligations for both sides. “The airlines would be paid by the fund in return for advertising space on their websites, promoting [Bulgarian] municipalities and their tourist attractions,” Angelov said.

Like many other low-cost airlines, Ryanair flies mainly to regional or secondary airports that charge lower fees. Sometimes, these airports happen to be even closer to the central city areas than the main airports, as is the case with Belfast, Gothenburg and Rome.

Cheaper is better

Ryanair has the reputation of unscrupulously pursuing its agenda in all negotiations with airports, with the end goal being lower costs. It is no wonder that its chief executive Michael O’Leary is one of the least liked in the industry.

In the past, the airline has employed such tactics as pitting nearby airports against each other for its business and arm-twisting airports into agreeing to its terms. In April 2006, Ryanair surprised the management of Cardiff Airport by announcing an end to flights to Dublin. More recently, the airline said it would cease operations in Budapest and Prague starting with October 2010 because of the high fees.

This constant drive to minimise airport and ground personnel costs is the main reason for Ryanair’s ability to offer cheaper prices to its customers. As an example, by booking two months in advance, flying from London to Madrid would cost 35 euro with Ryanair, compared to about 150 euro using British Airways or Iberia.

The service offered for the lower price is also different – Ryanair passengers end up paying for extras like food, seat preference and luggage, as do customers of other low-cost airlines like easyJet and Wizz Air.

It is still unclear what destinations Ryanair would pick in Bulgaria and where those flights would be headed. But according to an Economy Ministry source, the expectation is that Plovdiv would be linked to five destinations and flights could be launched as early as September.

Kapital weekly, issue 22

About 600 British property owners have not paid their estate taxes in the Bulgarian resort town of Pamporovo for the past two years, Bulgarian news agency BTA said on July 1 2010.

According to Chepelare deputy mayor Georgi Pepelanov, the municipality has sent nearly 600 letters to debtors, addressed to the UK, in which the owners concerned are “kindly requested” to pay their taxes.

The municipality’s mailings cost 600 leva, as each letter costs about one lev, the report said.

Perhaps to defuse tension, Pepelanov said that the municipality is certain that this was not a deliberate evasion but merely a misunderstanding between the British owners and the companies managing their properties in Bulgaria.

However, the municipality is also owed a large sum from local hotels in the resort of Pamporovo.

According to the BTA, the sum owed by the British and the hotels amounts to 600 000 leva in total.

“Russians and Spanish nationals also have property here but they have paid taxes on time,” Pepelanov said.

So far, the municipality has only received about a third of the money owed to it by hotels in Pamporovo.

The Sofia Echo

One of Europe’s largest low-cost airlines, Ryanair, plans to start flying to and from Bulgaria’s second largest city of Plovdiv in September 2010, Bulgaria’s Deputy Economy and Tourism Minister Ivo Marinov was quoted as saying by Bulgarian-language media.

But to launch flights to Bulgaria, Ryanair asked for lower landing fees charged by the country’s airports, Marinov said during a discussion in Parliament on the topic of Bulgarian tourism. It was a demand that the Cabinet was now considering for the less-used Plovdiv airport, at least for a period of two years.

Plovdiv would be Ryanair’s first destination in Bulgaria.

Bulgarian-language Dnevnik daily also quoted Ivelina Grozdeva of the Bulgarian Hotel and Restaurant Association as saying that Ryanair should be allowed to also operate flights to Sofia, Bourgas and Varna.

The Sofia Echo

Bulgarian PM Borisov (standing) and Finance Minister Djankov during Friday's news conference during which they made staggering revelations that the country's budget deficit doubled in 2009. Photo by BGNES

Bulgaria’s 2009 budget deficit has doubled as a result of “hidden” contracts made by the Stanishev Cabinet, the Borisov government has announced.

Finance Minister Simeon Djankov stated that the state budgets for 2008 and 2009 will have to be revised and recalculated because of the contracts in question made by the previous government that the Ministers of Boyko Borisov were not made aware of when they took over in July 2009.

“We are going to revise voluntarily the budgets for 2008 and 2009, according to our best estimates at the current moment – unless there are more surprises, of course, that might be hidden somewhere else in the drawers of the various ministries. Thus, with the hidden contracts of the previous government that have recently emerged, our 2009 budget deficit almost doubles – from 1,9% to 3,7%,” Djankov declared at a joint news conference together with Prime Minister Boyko Borisov and Economy Minister Traicho Traikov.

Djankov emphasized the fact with the emergence of the “surprising” new deficit, Bulgaria no longer meets the Eurozone criteria as its budget deficit is over 3%.

Djankov and Borisov revealed that they had notified the EU institutions about the 2009 “hyper deficit”, as they call it, on Thursday afternoon.

“Unwillingly, our government has become part of the lies that our predecessors had been telling the EU institutions in Brussels. We have even lied involuntarily when we applied to the ERM II as well. We were telling the Eurozone we are ready without knowing that the previous government had laid this trap for us,” PM Borisov said.

“This doubling of the 2009 budget deficit means at least two things. First, it is very likely that now that our European partners know about these results, Bulgaria may face infringement procedures because it actually had a hyper-deficit in 2009. Every single time that the Bulgarian Socialist Party has been in power, Bulgaria has gotten into financial trouble. This happened after the Lukanov government, after the Videnov government, and now after the government of Sergey Stanishev,” Finance Minister Djankov stated.

He emphasized that the sanctions that Bulgaria might have to face on part of Brussels most likely would entail regular monitoring of the country’s finances, and respective reports every six months, which means that Bulgaria will not be able to apply to join the ERM II in 2010 as Djankov originally planned.

The Finance Minister pointed out that because of the unforeseen expenses the government will have to make under the “hidden” public procurement contracts, it will have to revise the adopted anti-crisis package of 60 measures by cutting state spending even further.

Sofia News Agency (novinite.com)

Bulgaria's center-right government has blamed their Socialist predecessors for the dashed hopes for entry into ERM II in 2010. Photo by BGNES

Bulgaria’s center-right government abandoned plans on Friday to apply to join the bloc’s exchange-rate mechanism, the so-called Eurozone waiting room, over a larger than expected 2009 deficit caused by unaccounted procurement deals, signed by the previous Socialist-led cabinet.

“It would be insolent to apply for ERM II and the eurozone given the high levels of the deficit”, Prime Minister Boyko Borisov told a news conference. “We have in fact lied to our (EU) colleagues about our readiness for the euro zone being unaware of this trap.”

Bulgaria’s Finance Minister Simeon Djankov told the same press conference that the country’s aspirations to join ERM II will not be rewarded this year.

“Bulgaria’s hidden budget deficit has ruined its dreams of joining the eurozone due to financially unaccounted procurement deals, which increased the 2009 gap to 3.7% of gross domestic product (GDP) from an initial 1.9%,” Minister Djankov said.

He announced that the budgets for 2008 and 2009 will be revised after annexes to a total of 150 contracts incurred losses to the budget worth BGN 2,15 M.

“We were expected to be a fiscal model for the other European countries together with Estonia, now I will feel only shame in Madrid ( at the meeting of the EU finance ministers next week) when I tell my colleagues what has happened,” Djankov fumed.

“Europe does not make a distinction between current and former governments. I represent Bulgaria and now it is a shame,” he added.

The finance minister stressed that the revision of the budgets from the last two years will not reflect on the budget for 2010 and the government will do its best to keep the budget deficit under 3% in line with the Maastricht criteria.

“This year, there is no risk for the fiscal stability, the currency board and the banking system thanks to our tight fiscal policy,” Djankov said.

Joining the exchange-rate mechanism was assigned top priority for this year by the new Bulgarian center-right government, which was the reason why it stuck to tight financial policy at the end of 2009 and delayed payments to businesses in a bid to keep low the budget deficit.

Minister Djankov, a World Bank economist, hoped to offset a possible reluctance to admit Bulgaria into the ERM, stemming from the global crisis, by garnishing the application with a targeted balanced 2010 budget, small 2009 deficit and laws overhauling the inefficient health-care and social-security systems.

Entry into the so-called Eurozone waiting room would have brought Bulgaria closer to the umbrella of the euro region and the protection of the European Central Bank and was conditional on whether the new government would succeed to restore Brussels trust and the budget deficit that the country has posted.

Countries must be members of ERM II for two years before they can formally join the eurozone.

Bulgaria so far believed that it could be ready for euro entry by 2013.

Sofia News Agency (novinite.com)

In April 2010, company representatives are scheduled to arrive to make a final decision on the matter, according to Doichin Angelov, director of Plovdiv airport, according to a media statement on March 24 2010.

The Ryanair delegation is expected to arrive in Bulgaria on April 6 and will remain in the country until April 15.

“They will meet with the Transport Minister Alexander Tsvetkov and subsequently will travel to Plovdiv, where we are to finalise our potential agreement with them,” Angelov said in the statement.

Ryanair has been showing interest in Bulgaria for several years. But as airport taxes are poised to become three times cheaper than those at Sofia as of April 1, the reality for the line to be launched becomes ever more real.

A forum between the Plovdiv municipal administration and the Bulgarian-Catalan chamber of commerce BGCAT was held in Plovdiv on March 23.

Meanwhile, Sofia Airport said that Danish budget carrier Cimber Sterling will link Copenhagen and Sofia and flights will be conducted biweekly, on Thursdays and Sundays, Dnevnik reported. Currently there is no direct flight to the Danish capital. The flights will start on March 28.

Bulgaria Air used to fly Copenhagen, but the service was withdrawn in 2006.

The ski season in Bulgaria’s southernmost resort of Pamporovo in the Rhodope Mountains is due to open on December 19 2009, a media statement said.

The newest attraction at the resort is floodlights installed at the Snejanka 3 slope as well as the Stanata (The Wall), Pamporovo’s most demanding slope. The media statement also says the complex is equipped with a new dental and first aid medical centre, Medicus Alfa, which will operate 24-hours.

The resort currently has more than 19km of slopes, 95 per cent of which can be serviced by snow cannons if needed. A brand new six-seater lift has also been installed as well as a recreational park and an “extreme park” all within the premises.

Finally, the report’s authorities believe that with the inauguration of the new border crossing point between Bulgaria and Greece at Zlatograd, many people in northern Greece will visit the resort, thus boosting the local economy.

Greek tour operators have been invited to attend the official inauguration ceremony on December 19. Tourists are also expected to flock from Serbia, Macedonia and Montenegro after the visa regime for the aforementioned countries is officially dropped the same day.

A new weekly Moscow – Plovdiv – Moscow flight was inaugurated on December 25 2009.

The carrier is S7 Airlines, described in a report by Bulgarian news agency Focus as the second-largest airline in Russia after Aeroflot.

Flights will be once-weekly on Fridays.

The airline has several connecting flights to destinations in the Middle East, which could boost passenger flow to Plovdiv, Focus said.

An upgrade of Plovdiv Airport was completed in 2009 after an investment of about 40 million leva, but more funds will be required to revamp the airport completely.

The airport, frequently used by tourists headed for Pamporovo and other Rhodope destinations, is said to service about two million passengers a year.