1. General Terms: Incentive Discounts Programme for Traffic Development at Sofia Airport 2018 1.1. This Programme containing Incentive discounts on the airport charges aims at promoting the sustainable development of Sofia Airport, the efficient utilization of the airport infrastructure, the improvement of the destination connectivity and establishment of long-term strategic partnerships with the operating Air Carriers. 1.2. Incentive discounts are granted on equal, non-discriminatory basis under transparent terms and conditions to all Air Carriers that meet the criteria set out in this document. 1.3. Incentive discounts are provided for: 1.3.1. New International passenger route to/from Sofia Airport - year-round or seasonal; 1.3.2. New International all-cargo route to/from Sofia Airport or additional flights on an existing all-cargo route to/from Sofia Airport; 1.3.3. Increased capacity on existing passenger route to/from Sofia Airport by aircraft upgrade; 1.3.4. Transfer passenger traffic through Sofia Airport on scheduled services; 1.3.5. Support to air transport competitiveness on Domestic routes to/from Sofia Airport; 1.3.6. Air Carriers largely contributing to the development of the network of direct scheduled routes from Sofia Airport; 1.3.7. Increase in passengers carried on International and Domestic routes to/from Sofia Airport; 1.3.8. Flights related to events promoting air transport. 1.4. Incentive discounts are granted in the event of compliance with all the terms and conditions stated in the Programme. 1.5. Unless otherwise stated, Air Carrier wishing to take advantage of an incentive discount under any of the categories set out in p.1.3., should send a written request not earlier than 3 calendar months and not later than 1 calendar month before starting its flight programme to/from Sofia Airport submitting all data required in the application form published at the official web site of the Airport Operator. /amended/ 1.6. In case the submitted application is approved, the Airport Operator shall send an official reply (Letter of Confirmation) to the Air Carrier confirming that the mentioned flight programme meets the criteria for applying for the respective incentive discount. Only Air Carriers who Page 1 of 12
received such Letter of Confirmation can be considered approved for applying for the incentive discounts under p. 1.3. /amended/ 1.7. In case any long-term changes occur in the flight programme on the route eligible for an incentive discount under p. 1.3 (for a period longer than 1 calendar month) during the relevant period of the respective incentive discount, the Air Carrier shall notify the Airport Operator not later than 1 calendar month after the changes occur. In case of failure to do so, the Letter of Confirmation shall be cancelled. /amended/ 1.8. In case the Air Carrier terminates its flight programme on the route approved for an incentive discount under p. 1.3, before the end of the relevant discount period, that incentive shall not be granted. /amended/ 1.9. At the end of every relevant period of the respective discount under p. 1.3. that the specific route is eligible for, the Airport Operator shall calculate the amount of the incentive and prepare a bilateral agreement. The discount shall be paid off after the bilateral agreement is signed by the Airport Operator and the Air Carrier. /amended/ 1.10. In the event that an Air Carrier qualifies for more than one incentive discount within one airport charge category, only the highest discount shall be applied. 1.11. The Airport Operator shall not provide incentive discounts when: 1.11.1. The Air Carrier taking advantage of an incentive discount has failed to meet the specific criteria for the respective category throughout the whole validity period of the incentive concerned; 1.11.2. The flight programme subject to an incentive discount has been replaced by a flight programme operated by another Air Carrier under a kind of partnership agreement between the Carriers concerned; 1.11.3. The Air Carrier taking advantage of an incentive discount repeatedly breaches the payment terms stipulated by the Regulation on Charges for Aerodromes and Air Navigation Services in the Republic of Bulgaria under the conditions of items 9.3. of the present Incentive Discounts Programme. 1.12. The present Incentive Discounts Programme for Traffic Development at Sofia Airport shall come into effect on 1 st January, 2018. It shall be applicable to all new routes launched within the period 1.01.-31.12.2018. As far as flight programmes launched in a previous period are concerned, the criteria and discounts set out in the Incentive Programme for Traffic Development at Sofia Airport for that respective period shall be applied. 1.13. The Airport Operator reserves the right to unilaterally review and/or amend the present Incentive Discounts Programme at any time during its defined period of validity. In case any such changes occur, they should be presented chronologically in a separate annex to this Programme. The Airport Operator has the responsibility to promptly inform the Air Carriers of the amendments and/or additions made to this Programme. Page 2 of 12
2. Incentive discounts for New international route 2.1 New scheduled intercontinental passenger route /amended/ A New scheduled intercontinental passenger route is one to an airport located outside the European continent (according to IATA classification) where no direct year-round flights have been operated (with or without an intermediate stop) from/to Sofia Airport during the preceding 12 consecutive months. Priority is given to flights to North and South America, Asia. The Incentive discount is calculated based on the applicable Landing Charge and it is provided for a period of 3 years from the launch date of the new route, as follows: /amended/ Period of flight operations on the route Year 1 12 months from the inaugural flight on the route 99% reduction Year 2 (subsequent 12 months) Year 3 (subsequent 12 months) 99% reduction 80% reduction The Incentive discount is granted to an Air Carrier that: a) operates at least 1 flight per week on the route year-round with no intermission; and b) performs not less than 80% of the initially filed flight programme for one-year period. In the event that an Air Carrier which has been operating on the particular route applies for this Incentive, it will be eligible after 24 months of the last flight on the same route. When more than one Air Carriers simultaneously apply for this Incentive, the first Air Carrier to start flight operations on the route shall be eligible. In the event that an Air Carrier launches scheduled year-round services to an airport where no direct flights were operated from/to Sofia Airport during the preceding 12 consecutive months, when it results of an operational change in the same Air Carrier s flight schedule from Sofia Airport and it is connected to termination of services to a neighbouring airport (serving the same residential area or catchment area), such route shall not be considered a new route. The present incentive discount is granted when the departure time of the Air Carrier s flights on the route does not coincide with the peak periods in the airport timetable at the respective terminal as published by the Airport Operator. Air Carriers are obliged to apply for this Incentive category prior commencement of operations, in a way specified by the Airport Operator. Page 3 of 12
2.2 New Seasonal passenger route A New seasonal passenger route is one to an airport located in a strategic region inside Europe or one to an airport outside the European continent (according to IATA classification) where no seasonal flights have been operated (charter or scheduled) from/to Sofia Airport during the respective season of the flight schedule in the preceding year. For seasonal flights to an airport outside Europe, priority is given to flights operated to North and South America, Asia. The Incentive discount is calculated based on the applicable Landing Charge and it is provided for a period of one IATA season from the launch date of the route, as follows: /amended/ Period of flight operations on the route Season 1 Within the first season of the flight schedule (Winter or Summer) 60% reduction The Incentive discount is granted to an Air Carrier that: a) operates at least 1 flight per week on the route but not less than 10 flights per IATA season; and b) performs not less than 80% of the initially filed flight programme. The present incentive discount is granted when the departure time of the Air Carrier s flights on the route does not coincide with the peak periods in the airport timetable at the respective terminal as published by the Airport Operator. In the event that the flight programme from Season 1 (Winter or Summer) is extended into the subsequent season (Summer or Winter), this incentive discount shall not be granted for the second season of operation. Air Carriers are obliged to apply for this Incentive category prior commencement of operations, in a way specified by the Airport Operator. Page 4 of 12
2.3 All-cargo flights on a New international route or additional flights on existing all-cargo route /amended/ The Incentive discount is calculated based on the applicable Landing Charge and it is provided for a period of one year from the launch date of the new flights, as follows: Period of flight operations on the route Year 1 12 months from the first flight on the route (inaugural or additional one) 20% reduction A New international cargo route is one to an airport outside the Republic of Bulgaria where no allcargo flights have been operated during the preceding 6 consecutive months. The Incentive discount is granted to an Air Carrier that operates not less than 5 all-cargo flights on the route for a period of 12 consecutive months. The Incentive discount for additional flights on existing all-cargo international route is granted only for the additional flights on the route an existing or new one. /amended/ Air Carriers are obliged to apply for this Incentive category prior commencement of operations, in a way specified by the Airport Operator. Page 5 of 12
3. Incentive discounts for increased capacity on existing passenger route by changing the type of aircraft This Incentive discount is granted to Air Carrier allocating aircraft with higher MTOW and higher seat capacity on a year-round scheduled route already operated by the Air Carrier from/to Sofia Airport. The Incentive discount is calculated on the difference between the MTOW of the new aircraft type and the most frequently operated aircraft with lower MTOW during the preceding 12-month period multiplied by the Landing Charge unit applicable to the new aircraft type. The Incentive is granted for a period of one year from the date of the first flight of the new aircraft type on the route, as follows: Period of flight operations on the route Year 1 12 months from the first flight on the route 50% reduction on the MTOW difference The Incentive discount is granted provided that: а) during the first 12 months of the operation of the new aircraft type the Air Carrier has registered at least 5% increase in the overall tonnage of MTOWs and the overall number of seats of all aircraft operated by the same Air Carrier on the given route compared to the overall tonnage of MTOWs and the overall number of seats in the preceding 12-month period on the same route; and b) during the respective 12-month period, the Air Carrier has performed with the new aircraft type at least 10% of all scheduled flights on the given route. In the event that the number of aircraft movements performed by the Air Carrier on the route for the first 12-month period of operation of the new aircraft type has decreased by more than 5% comparing to the number of movements preformed on the given route during the preceding 12- month period, this Incentive shall not be granted. Air Carriers are obliged to apply for this Incentive category prior commencement of operations, in a way specified by the Airport Operator. Page 6 of 12
4. Incentive discounts for transfer passenger traffic on scheduled services This Incentive discount applies to all Air Carriers contributing to the development of transfer passenger traffic through Sofia Airport (on Scheduled International and Scheduled Domestic services). The Incentive discount is calculated based on the applicable Passenger Charge and it is valid for the period of the present Incentive Discounts Programme. Passenger category at Sofia Airport /amended/ Passengers arriving on International or on Domestic flight and departing on International flight Passengers arriving on International flight and departing on Domestic flight 60% reduction on the applicable Passenger Charge The Incentive discount is provided under the following conditions: а) transfer passenger is one travelling to a final destination different from the origin destination connecting at Sofia Airport from one flight number to another (of the same Air Carrier or of another Air Carrier); and b) the connecting time between the arrival and the subsequent departure from Sofia Airport is up to 8 hours (this condition is not applicable for passengers connecting from International to Domestic flight and vice versa); c) passenger categories exempt from paying Passenger Charges (children under 2-year age, transit passengers) are not included in the scope of this Incentive. The Incentive discount as per p.4 is granted to the Air Carrier to which Passenger Charges are levied by the Airport Operator, provided timely and reliable information (complete PTM) including data on connecting passengers through Sofia Airport is provided by the Air Carrier. Air Carriers are not obliged to apply for this Incentive category - the discount is calculated automatically. Page 7 of 12
5. Incentive discounts for Support to air transport competitiveness on Domestic routes All Air Carriers operating scheduled passenger flights (year-round or seasonal) on Domestic routes are eligible to the following Incentive discount on the Landing charge: Flight category Scheduled passenger flights on Domestic routes Route Sofia Bourgas - Sofia Route Sofia Varna - Sofia 70% reduction 90% reduction Scheduled passenger flight on Domestic route is one operated as per published seasonal flight schedule from/to Sofia Airport to/from airport located in the territory of Republic of Bulgaria. This Incentive is not applicable for ad-hoc charter passenger flights, all-cargo flights, general aviation and other non-commercial flights. Air Carriers are not obliged to apply for this Incentive category - the discount is calculated automatically. Page 8 of 12
6. Incentive discounts for Air Carriers largely contributing to the development of the network of direct scheduled routes from Sofia Airport 6.1. Home-based aircraft of Air Carriers with regular flight programme This Incentive discount applies to Air Carriers which aircraft are home-based at Sofia Airport and are engaged in regular flight programme where Sofia Airport is origin point of their flights, thus largely contributing to the development of the network of direct routes and the connectivity of the destination. The Incentive discount is calculated based on the applicable aircraft Parking Charge at Operational stand and it is valid for the period of the present Incentive Discounts Programme, as follows: Number of home-based aircraft at Sofia Airport More than 3 aircraft of the same Air Carrier are home-based at Sofia Airport More than 6 aircraft of the same Air Carrier are home-based at Sofia Airport 50% reduction on the charge for Operational stand day and night 70% reduction on the charge for Operational stand day and night The Incentive discount is granted to Air Carriers that: а) file, in a way specified by the Airport Operator, a regular year-round and/or seasonal flight programme from/to Sofia Airport for a period of one year and the respective number of homebased aircraft operated on flights where Sofia Airport is origin point; and b) meet one of the above stated criteria, from the moment it is fulfilled. The Incentive is not applicable for home-based aircraft with long-term stay (over 72 hours) at Sofia Airport when they are not engaged in the daily performance of the regular flight programme filed by the given Air Carrier. Carriers are obliged to apply for this Incentive category in a way specified by the Airport Operator initially when the criteria for number of home-based aircraft is fulfilled, and subsequently prior the beginning of each calendar year. Page 9 of 12
7. Incentive discounts for number of departed passengers of the same Air Carrier This Incentive discount is granted to all Air Carriers which record over 100 000 departed passengers for a period of 12 consecutive months, as of 1 st July, 2017. The Incentive discount is calculated on the applicable Passenger Charge on International and Domestic services by deducting the respective amount of reduction per departed passenger corresponding to the total number of departed passengers recorded on International and Domestic routes by a given Air Carrier for the stated 12- month period, as follows: Number of departed passengers for 12 months Over 100 000 up to 200 000 passengers Over 200 000 up to 300 000 passengers Over 300 000 up to 400 000 passengers Over 400 000 up to 500 000 passengers Over 500 000 passengers EUR 0,50 reduction per departed passenger EUR 0,75 reduction per departed passenger EUR 1,00 reduction per departed passenger EUR 1,20 reduction per departed passenger EUR 1,35 reduction per departed passenger This Incentive is applicable to all departed passengers (on scheduled or charter flights) of a given Air Carrier, with the exclusion of: а) passengers exempt from paying Passenger Charge (children under 2-year age, transit passengers); and b) transfer passengers meeting the criteria of the Incentives as per p.4 of the present Incentive Discounts Programme. Air Carriers are not obliged to apply for this Incentive category - the discount is calculated automatically Page 10 of 12
8. Lump incentive discounts /amended/ Flight of an Air Carrier, planning to operate or already operating on a regular flight programme to/from Sofia Airport, on the occasion of an event promoting the air transport to the public: 50% reduction on the Landing Charge (irrespective of the destination ); 20% reduction on the aircraft Parking Charge for stay up to 24 hours (full Parking Charge is due after expiration of the 24-hour period); 20% reduction on Passenger Loading Bridge Usage Charge (when applicable). Given Air Carrier may apply for this Incentive no more than once a year. The Airport Operator reserves the right to refuse provision of the above stated Incentives. Air Carriers are obliged to apply for these Incentive categories prior the respective operation, in a way specified by the Airport Operator. Page 11 of 12
9. Payment of Incentive discounts 9.1. The incentives under p.4, p.5, p.6 and p.8 of this Incentive Discounts Programme shall be applied on a current basis, after services being provided and respective airport charges being levied. 9.2. The incentives under p.2, p.3 and p.7 of this Incentive Discounts Programme shall be granted after the expiration of the relevant period. The amount of the discount to be granted to a given Air Carrier is calculated no later than 2 months after the final date of the period to which it applies. In the event of discrepancies between the data initially submitted by the Air Carrier on the incentive application form and the reported statistical data of the Airport Operator, the discount shall be calculated based on the Airport Operator s data. The amount accumulated from incentive discounts for the relevant period shall be settled against current and future receivables from the Air Carrier in respect of airport charges. Exceptionally, the incentive discounts can be settled against outstanding overdue payments for airport charges of a given Air Carrier, no matter the period they refer. After the expiration of the last relevant period of the respective incentive discount, if given Air Carrier has terminated its flight programme subject to incentive discounts and has no due payments for airport charges to the Airport Operator, the calculated incentive discount shall be transferred to the Air Carrier s bank account within 2 months of the date of discounts calculation. 9.3. The level of the incentive discount under p.2, p.3 and p.7 of this Incentive Discounts Programme shall be reduced automatically by 20% with respect to an Air Carrier which within the 12-month application period of the incentive has delayed payment of airport charges by more than 10 days after the payment date indicated on the invoice, in more than 3 invoicing periods. /amended/ This reduction shall be applied for each period of delay. Page 12 of 12