Sofia Airport: A transformation begins
By Jesus Caballero, Chief Executive Officer of SOF Connect
Sofia is the capital of Bulgaria, a country in Southeast Europe that is growing fast economically. The town at the foot of Vitosha Mountain is increasingly attractive to thousands of foreigners who find a warm welcome from hospitable people, a huge cultural heritage preserved in 1300 years of history, excellent opportunities for business, sea and ski, medical and wellness tourism, great food, entertainment and lively nightlife.
Bulgarians, on the other hand, are discovering opportunities to travel more and more, while the middle class is gradually increasing. The country is one of the largest IT hubs in Europe, where global companies have centers for shared services, and more Bulgarian startups are entering the global market.
The airport
The airport was established nearly 85 years ago, operating international flights since 1949. In 2019 it served more than 7 million passengers before COVID changed the face of the aviation industry. Historically state-owned, in April 2021 a 35-year concession was granted to SOF Connect, backed by the Meridiam investment fund and Munich Airport.
“Bulgaria has huge potential, we will completely transform the airport,” said Jesus Caballero, CEO of the company that manages the airport. “The concession came at a difficult time. Perhaps the most difficult one for aviation in general, but the possibilities for economic development of Sofia and Bulgaria are huge and we will capitalise on this. We are actively working to attract new airlines, create new destinations, including intercontinental ones, and significantly improve the customer experience. Not much has been invested in the airport in recent years, but this is not only a problem but also an opportunity we will take advantage of in cooperation with the Bulgarian government.” says Mr. Caballero, an experienced aviation manager who until recently managed Seville Airport.
Investments, reconstruction, new terminal
More than EUR 624 million will be invested during the concession period.
A completely new terminal at Sofia Airport will be built in the next 9 years, according to SOF Connect’s commitment to the Bulgarian state, with the vision of transforming the existing Terminal 1 into a private flight, executive aviation and fixed base operator headquarters whilst preserving the building as a historical landmark. In the coming years the existing Terminal 2 will be renovated with 3 main improvements – a completely new commercial area, reconfiguration of the existing security zone and checking area, curbside, car park and addition of new contact gates. More significant changes are coming in the next phases of the project aimed at improving airport capacity and user experience.
No charges increase in 2021 and 2022
Despite the challenges in the aviation industry and specifically for Sofia Airport, airport charges will not be increased in 2021 and 2022. This is to support the recovery of the airlines and is also agreed with the Bulgarian government.
Complete reconstruction of the commercial area
The current retail space is outdated with neither the right location nor with a broad enough product range. This is set to change. By the middle of 2022, the area will be completely reconstructed in line with today’s requirements and the best practices in Europe. The estimated value of the planned revamp is expected to be about EUR 4 million, with duty-free and retail opportunities open for public tender.
New airlines, new routes
Negotiations for nearly 100 possible new routes from Sofia Airport have already started, backed up by the competitive charges already on offer. Namely, there is 99% discount on landing charges for launch of new intercontinental routes in 2022: part of the airport network development strategy and in line with changed marketing conditions impacting whole aviation sector. Up to 50% reduction of landing charges is provided for airlines that retain a certain volume of flights to Sofia, and a serious discount for operating domestic routes. The management strategy is to attract airlines to base their aircraft in Sofia, so aircraft parking fees are also significantly discounted.
Sofia Airport is in competition not just with airports in Bulgaria, but airports across Europe which are fighting to show their commercial value to the growing airlines.
Competitive airport charges along with attractive incentive schemes have led to a resurgence of airline interest in Sofia Airport. Scheduled flights to St. Petersburg and a restart of the direct Sofia – Doha route are already positive signs.
The airport is not just about the flight network, passenger experience and infrastructure investments according to the new team in Sofia. Promoting Sofia and Bulgaria as attractive destinations is a joint effort and Jesús Caballero has embarked on a series of active negotiations with key players in the tourism business – from the Ministry of Tourism, municipal authorities, tour operators and travel agents, hoteliers and restaurateurs and many others. The tourism industry in Bulgaria is delighted by the energy of Sofia Airport team working with all stakeholders to promote the destination together.
A whole new customer experience
Airports are similar, but also different. Every element of the consumer experience is important – from arriving by public transport, to car parks, check-in counters, security checkpoints, waiting areas and restaurants. Bulgarians are quite critical of the current conditions at the airport, such as cleanliness, parking, security checks and food courts. For all these elements measures are already in place either for instant improvements, or complete change.
Car park modernisation is already underway, and significant amounts will be invested in the coming years to promote a positive user experience, such as online booking for parking and shopping.
The new business models
In many post-communist countries, where the whole economy was state-regulated, all activities were carried out in-house. This is a common legacy of socialism, but it holds significant room for improvement.
As a private company/ entrepreneur, SOF Connect has a vision for the management of activities such as duty-free, travel retail and sanitisation. Appointing companies with proven international experience in their respective fields improves performance and brings significant benefits to passengers.
Regardless of the challenges facing the aviation industry, no staff changes have been made at Sofia Airport in 2021. Team care and staff motivation are, we believe, crucial to long-term success. SOF Connect management works closely with syndicates to balance the interests of workers and business development, which is not always an easy equation.
“Even though aviation has experienced the worst crisis of all time, I believe that recovery is imminent. The team we have built, and Bulgaria’s potential make me optimistic about future in which Sofia Airport can become a regional hub and a place to be proud of “, says Jesus Caballero .
Environmental challenges
Carbon emissions at Sofia Airport are challenging, with some outdated processes and equipment. It’s not only a question of regulatory demand; Bulgarians rightly expect carbon neutrality and environmental custodianship from us.
Some of the recent investment into modernisation plans include EUR 40 million deal aimed at delivering a smart and sustainable airport aligned with EU climate goals. The sum, provided by European Investment Bank, is state-of-the-art utilisation and decarbonisation-focused, delivering a post-COVID green business transition.
This year, the goal is to achieve Level 3 in ACI EUROPE’s Airport Carbon Accreditation programme. “Level 3 may not sound like a very big goal, but it all depends on present status quo. We are starting from a relatively low base with the ambition to progress quickly. Sustainability is a high priority for SOF Connect,” says Jesus Caballero.
More predictable air traffic through A-CDM
For an airport like Sofia, the implementation of Airport Collaborative Decision-Making can only bring benefits. More and more European airports are optimising in this way. According to the management of SOF Connect, A-CDM will add value with reasonable investments and relatively small changes, resulting in increased operational efficiency
Digital transformation
Digitalisation offers many opportunities at Sofia Airport, from a completely new website through to strengthening electronic processes and communication. The management of so-called big data to information security and the elimination of paper are projects the team is already working on. Without a doubt, information is a critical asset that underpins business success.
As Jesus Caballero concludes “We look forward to the recovery in aviation industry. But we can use the time we have until that happens to make changes, which means to adjust ourselves according to the new reality and reform the way we work. The Sofia project is a great opportunity for a complete transformation, which I believe will set an example in Europe in the next 2 years.“
