Economic Effects and Invasion of Low-Cost Carriers on the Bulgarian Air Market

Low cost aviation carriers already occupied a significant share of the Bulgarian aviation market for passenger transportation. The reality is that, thanks to the emergence of low-cost carriers, the number of passengers transported through airports is increasing. This, of course, is due to the low transportation prices offered by these carriers. The availability of such prices is related to the measures taken to reduce the operating costs and the successful tariff management policy achieved by the carriers. At the same time, some non-market methods are used to de facto subsidize the activity of carriers. Some intentions are declared or already established for setting up development funds for airports that redirect public funds to the carrier. The state approves airport charges that are lower than the actual costs of covering the fees in order to attract cheap operators. Tax relief is introduced for airlines that do not benefit from these concessions and take unfairly allocated airport charges for all carriers. The present report analyzes the policy related to the activities of low cost airlines on the Bulgarian market, including examples of dumping, inconvenience for passengers related to the step between the seats (quality of service that is due to low prices, something no organization or institution protects). Some suggestions and proposals are given in order to solve the raised problems.