The Bulgarian government has lodged a formal protest with the Lebanese government on its announcement that it would prohibit Bulgaria’s airline Balkan Air airplanes from landing in its territory. Lebanon announced the move following the acquisition of control of the Bulgarian company by an Israeli group headed by the Gad Zeevi group and including Knafaim, controlling shareholders in Arkia.
"The Ministry of Transport of the Bulgarian government hereby notifies Lebanon that the boycott it imposed on Balkan Air, Bulgaria’s national airline, represents a violation of the bilateral agreement in air traffic," a government spokesperson reported. Lebanon had announced it would not permit the three-weekly landings by Balkan Air at Beirut, as from July 15.
The Bulgarian government claims that the parties to the agreement must first convene a special meeting if they want to make changes, before taking any unilateral steps. "Lebanon did not do that, and therefore violated international aviation laws.
A week ago, 75% of the shares in Balkan Air were sold to Zeevi-Arkia for $150,000 in cash, and a commitment by the purchasers to pay the company’s debts and invest $100 million in the next five years in developing it and restructuring it.
Arkia hopes that the Balkan Air routes, acquired together with the company, will enable it to expand its international activities, but for the moment, the opposite appears to be happening. Following the prohibition by the Lebanese government, Syria also announced a similar prohibition on Balkan Air airplanes flying in her territory and landing in Damascus.
Arkia’s management expressed concern at the situation arising from the widening Arab boycott. Sources close to the company said they had not, in any scenario, expected negative consequences to result from the acquisition of Balkan Air.
Zeevi-Arkia executives will leave for Sofia in the next few days to discuss the situation. Arkia general manager Izzy Borovitz is already overseas. Acting general manager Shlomo Hanael refused to comment on the deterioration of ties between Balkan Air and the Arab world.
Published by Israel's Business Arena July 12, 1999