




































 

49 

 

Finance, Accounting and Business Analysis 
Volume 5 Issue 1, 2023 

http://faba.bg/       
ISSN  2603-5324 

 

Financial Performance of Air Transport Operators in the Conditions of 

Digital Transformation Processes 

 

Petya Koralova-Nozharova  

 

Department of Regional and sector economy, Economic Research Institute at Bulgarian Academy of 

Sciences, Sofia, Bulgaria 

 

Info Articles   Abstract 

 

 

History Article: 

Submitted 10 May 2023 

Revised 27 May 2023 

Accepted 31 May 2023 

 

 Purpose: The study aims to examine the financial performance of air 

passenger carriers in the case of a developing country with transition 

economy like Bulgaria. It also examines both the main trends in the 

digital transformation processes of the aviation sector and the obstacles 

that hinder the widespread implementation of information and 

communication technologies in the sector.  

Methodology: Through regression modelling, it is identified which 

financial performance indicators most strongly influence the digital 

transformation process of air passenger carriers.  

Results: The results of the study show that Bulgarian aviation 

operators are not capable to cover their short-term liabilities and are 

strongly dependent on their creditors, especially in terms of exogenous 

shocks like COVID-19 pandemics, political crisis, ongoing military 

conflicts in Ukraine and uncertain business environment. The country 

ranks on last place according to the values of DESI index in 

comparison to EU average levels in terms of digital skills of transport 

workers, e-commerce, and deployment of ICT.  

Practical implications: The implications of the study could serve as 

basis for future research in the field of financial performance of other 

modes of transport or to be used for examining the air transport of 

countries with similar political and economic characteristics like 

Bulgaria.  

Paper type: Research paper 

 

Keywords:  

financial performance, air 

passenger carriers, digital 

transformation. 
 

 

JEL: R41, G32, O31  

   

 
 
 

 
 

* Address Correspondence:   

E-mail: p.koralova@iki.bas.bg  

 

 

  

mailto:p.koralova@iki.bas.bg
https://orcid.org/0000-0002-5714-5687


Petya Koralova-Nozharova / Finance, Accounting and Business Analysis, Volume 5, Issue 1, 2023 

50 

 

INTRODUCTION 

 

In the last few years, the national economies of member-states have been exposed to various 

exogenous shocks. The impact of these processes creates serious problems for the financial and economic 

development of separate economic sub-sectors like air passenger transport. Since 2019 the aviation operators 

have been forced to cope with several risks, such as the imposed travel restrictions in domestic and 

international carriages because of COVID-19; increase in the price of petrol and its derivatives; higher total 

costs for aviation carriers because of the requirements for climate neutrality of the transport sector till 2050; 

as well as the digitalization of transport activities and transport infrastructure. For example, according to the 

statistical chartbook of the International Air Transport Association in the end of 2022 the number of 

passengers carried globally is 25% lower than that number in 2019 (IATA 2022). In Europe the volume of 

passenger carriages in 2021 is 3 times lower than in 2019, while in 2020 this volume is even 4 times lower, 

compared to the values in 2019 (EUROSTAT 2023a). Even more drastic is the decline in the number of 

passengers carried by the licensed air transport carriers in developing member-states like Bulgaria, where in 

2021 the volume of passenger carriages by air transport decreased 20 times compared to 2019 (Directorate 

General Civil Aviation Agency 2023a). 

On the other hand, COVID-19 pandemic period turned out to be the appropriate time for accelerating 

the digitalization process of main economic activities of business organizations. More and more air 

companies globally are using biometric data for servicing passengers both at the airports and on board of 

aircrafts (WNS 2018). In order to improve the quality of flights and the passengers ‘comfort during the flight, 

some of the air carriers have deployed applications for augmented and/or virtual reality. The usage of 

artificial intelligence and robots in the process of technical inspections for safety of aircrafts, as well as the 

introduction of digital technologies for making analysis for optimization of the air companies’ total costs are 

only little part of the structural changes in the functioning of air transport at national, European and global 

level.  

The deployment of digital technologies in the economic activity of air transport carriers is an intensive 

process that requires financial security, especially in the case of developing countries with transition 

economies, such as Bulgaria. This is due to: first – Bulgaria’s air passenger transport occupies hardly 1.4 % 

of the European aviation market (EUROSTAT 2023b). Second, the reported financial indicators by the 

Bulgarian air passenger carriers for the period of the pandemic (2019-2021) show lack of passenger transport 

activity except for the national air carrier; high unemployment rate in the sector and financial insolvency 

(Registry Agency 2023a). Third, the level of digital technologies deployed by the aviation operators lags the 

average European levels, as hardly 10 % of the business organizations are using cloud technologies in their 

main activity and only 3 % of them have introduced artificial intelligence (DESI 2022). 

In this regard, the purpose of the present study is to evaluate the financial performance of air 

passenger carriers in the case of Bulgaria as a prerequisite for more widespread implementation of digital 

technologies in the air transport. The object of research is a system of financial indicators (return on capital, 

revenues per employee, financial indebtedness, short-term liquidity rate), that characterizes the status-quo 

of the aviation operators. There will be used the methods of analysis and synthesis, as well as the methods 

of induction and deduction for the purposes of the literature review and the critical analysis of introduced 

policies for digitalization of the air transport. There will also be presented an econometric model of the 

correlation between financial and digital performance of Bulgarian air passenger carriers. 

 

LITERATURE REVIEW 

 
There are quite a few publications in the scientific literature, related to both the digitalization of 

passenger carriages by air transport and the financial performance of aviation operators. In the study of 

Zaharia et al. (2018) there have been identified the challenges to digital transformation of a key Romanian 

airport (Romanian Henri Coanda Airport). The authors have put the accent on the increase of operational 

effectiveness of the infrastructure site in terms of main airport operations, satisfaction of passengers on board 

of aircraft and generation of additional revenues for the ground-handling operators through the deployment 

of digital applications and digital walls. They summarize that there is a huge gap amongst the implemented 

Romanian airport management strategy and the development of the digital technologies globally. They 

outline that the persons employed by the ground -handling operator do not meet the digital requirements in 

terms of professional qualification and skills. 



Petya Koralova-Nozharova / Finance, Accounting and Business Analysis, Volume 5, Issue 1, 2023 

51 

 

The publication of Bil et.al (2021) evaluates the impact of digital technologies on the main aviation 

operations. They focus their study over the answers of three questions: how the deployment of information 

and communication technologies will contribute to: satisfying passengers ‘needs; achieving company’s 

vision and goals and creating competitive advantage for the company. Based on comparative analysis 

amongst 5 low-cost companies and 5 full-service companies, the authors evaluate the level of usage of In-

flight entertainment systems through the deployment of digital technologies. 

The study of Büyüközkan et.al (2021) is also of interest for the purposes of the present research, as it 

presents an innovative model for assessing the digital transformation and competence of low-cost carriers 

(LCC) in the case of Turkey through applying an integrated IVIF FMCDM methodology. The authors 

conclude that the integration of digital technologies in the management and organization of LCC’s main 

activities contributes to growth of their competitiveness, sustainability, productiveness, and better customers 

‘loyalty. Paprocki (2021) in his research tries to answer the question whether the usage of digital technologies 

and change of the applied business model for management of the air passenger transport could limit the 

energy consumption and greenhouse gas emissions by aircraft without reducing the quality of passenger 

services.  In this regard he proposes the usage of “Virtual air hubs” (VAH), with the help of which the fuel 

consumption by air transport could be reduced, the passenger services will be adapted to the needs of the 

customers and sustainability of air transport to exogenous shocks (pandemics, wars) will be increased. 

Regarding the financial performance of air carriers, an interesting publication is that of Raghavan and 

Yu (2021), whose main task is to evaluate the trade activity of large and medium-sized airport operators in 

the USA by using the financial indicators: return on investments, return on capital, return on sales, assets 

turnover, capital-debt ratio. For the purposes of the research, they apply regression analysis to study the 

correlation between airport operating specifics and their financial performance. They conclude that large 

hub airports perform better in liquidity ratios, while medium-sized hub airports perform better in leverage 

ratios. Perez et al (2022) examine the financial status-quo of 10 American aviation operators, which provide 

domestic passenger services so as to determine which indicators influence the most their economic recovery 

due to the pandemic COVID-19. According to them, the most important factors are carbon footprint of air 

carriers in relation to the climate change, change in the business management models and deployment of 

digital technologies.  

Based on the conducted literature review, the identified publications do not repeat the purpose of the 

present study. In some of the articles, the authors also evaluate a system of indicators in terms of financial 

performance of aviation operators and/or airport operators. However, the present research differentiates 

amongst them, as it tries to examine the correlation between financial and digital performance of air 

passenger carriers in the case of a developing member-state with transition economy like Bulgaria.   

 

TRENDS AND POLICY IMPLICATIONS IN THE DIGITALIZATION PROCESS OF AIR 

TRANSPORT 

 

Modern digital technologies allow to all participants in the passenger carriages by air transport to gain 

utilities, such as: better quality and comfort during travel; introduction of many applications for 

entertainment of passengers during the flight; better environmental and productiveness efficiency for 

aviation operators and creating economic growth. Already in the end of 2020, with the introduction of 

Sustainable and smart mobility strategy (EC 2020), the European Commission sets out three main priorities 

for development of the relative transport modes: strongly limiting the dependence of rolling stock on fossil 

fuels; development and usage of sustainable transport modes in freight and passenger carriages through the 

deployment of information and communication technologies (ICT); internalization of the external costs of 

transport and introduction of the “polluter pay principle”. In the section, concerning the development of air 

transport, it is proposed in the future to be used zero-emission technologies; to be constructed and introduced 

green aircraft; SESAR to be deployed so as till 2050 at the latest the greenhouse gas emissions by air transport 

to be reduced by 55 % compared to the values of 1990. 

In this sense, in 2021 the European Commission introduced a proposal for sustainable aviation fuels 

regulation (ReFuel EU 2021), whose purpose is to propose measures air transport to be included in the 

European Emissions Trading Scheme (EU ETS), to be encouraged the usage of sustainable aviation fuel 

(SAF) and to be constructed electric power stations on the territory of airports. The measures, listed in the 

document will contribute to the achievement of European Green Deal and Fit for 55 package goals for 

climate neutrality till 2050. In the ReFuel Aviation Initiative it is indicated that till 2030 at least 5 % of the 

aviation fuel used need to be SAF and by 2050 its relative share must reach 63 %. 

The fulfillment of such requirements is associated with an increase in the amount of the operational 

costs for air carriers, as they currently must comply with several imposed measures like: 

 Paying infrastructure charges, depending on the quantity of CO2 emissions and noise pollution in 

the vicinity of airports. 



Petya Koralova-Nozharova / Finance, Accounting and Business Analysis, Volume 5, Issue 1, 2023 

52 

 

 Possible introduction of air transport to the European Union Emissions Trading Scheme. 

 Offsetting carbon emissions through the participation of countries in the International Civil 

Aviation Organization (ICAO) Carbon Offsetting and Reduction Scheme for International 

Aviation (CORSIA). 

 Usage of synthetic and biofuels, which relative share since 01.01.2025 must be 2 % of the amount 

of the aviation fuel used. 

The establishment of the SESAR Joint Undertaking back in 2007 was the first step to improvement 

of the safety and security management of air transport services and their development in terms of the so-

called digital era (ACI 2019). At the end of 2019 there is already a talk about digital European Sky, where 

the latest digital technologies for transformation of the European aviation in terms of safe and efficient air 

traffic management while minimizing the harmful impact on the environment are used (SESAR 2019). In 

2019, the European Parliament adopted a regulation on the rules and procedures for the operation of 

unmanned aircraft for civil purposes (EP 2019).  

In this sense, the digitalization process impacts significantly, first the economic and financial status-

quo of aviation operators because: till 2050 there will be observed revolutionary changes in the aircraft 

construction industry, concerning the aero-dynamic structure of airplanes; the architecture of their power 

engines, wings, and fuselage; the emergence of electric aircraft and planes, powered by batteries (IATA 

2019). The introduction of such types of aircraft will lead to reductions in the sum of operational costs for 

air carriers, especially in the field of noise and environmental pollution. On the other hand, the system 

TaxiBot will be applied on the territory of airports. It is a revolutionary hybrid towing system, intended for 

taxiing of aircraft (van Winkel 2023). The usage of TaxiBot will have a positive economic effect on the 

financial performance of aviation operators, as it can contribute to 85 % fuel consumption reductions of 

aircrafts during their parking on the territory of airports.  

Second, the deployment of digital technologies will also influence the employment rate in the field of 

air transport. For example, the introduction of One ID (2023) by IATA presents opportunities for passengers 

to rationalize their travel through sharing information and processing contactless check-ins by biometric 

recognition. This implies reductions in the number of persons employed by ground-handling operators and 

job losses.  

Third, the deployment of digital technologies will create additional benefits for passengers by 

providing in-flight entertainments such as augmented and/or virtual reality, applying Internet of things for 

tracking passengers ‘luggage location, which fact will improve the reliability and transparency of the 

transportation services provided.  

In order to monitor the digital technologies implementation in the separate economic sectors of 

member-states, as well as to reach convergence in the digitalization process amongst countries, as early as 

2014 the European Commission introduced the DESI index (DESI 2023). The index consists of the 

following main components: human capital digitalization, connectivity, integration of digital technologies 

and digital public services. In this regard, on figure 1 they are presented the trends in the development of 

DESI index for Bulgaria in comparison to the EU average levels of the index, as well as the development of 

some of its constituent components that are relevant to the purpose of the present study. This analysis will 

allow to be evaluated the level of digital technologies implementation by business organizations in Bulgaria 

and in particular by aviation operators.  

As one can see from figure 1, Bulgaria is still lagging in the development of the DESI index, as in 2022 

its value is 38, while the average European value is 52. For the period after the COVID-19 pandemic, the 

index increases by 35 % in 2022 compared to 2019. The value of the index’ component “deployment of ICT 

by the business” is still significantly lagging the values of the component in the developed member-states like 

Belgium, Finland, Denmark, Slovenia, Austria аnd at the same time, this value is 2 times lower that the EU 

average values. In 2022 it is observed a growth by only 15 % in the value of the component, concerning the 

digital technologies implementation by Bulgarian business compared to 2019. This is because during the 

pandemics, most of the companies relied on state subsidies for covering their operational costs. Moreover, 

many companies were forced to cease their economic activities, especially in the field of air passenger 

transport, for example during that period, the national air carrier of Bulgaria operated 20 times lower 

volumes compared to 2019 (Bulgaria Air 2023).  
  



Petya Koralova-Nozharova / Finance, Accounting and Business Analysis, Volume 5, Issue 1, 2023 

53 

 

 
Source: Digital Agenda EU, https://digital-agenda-data.eu/ 
Figure 1. Information about DESI index and its constituent components 

 
The e-commerce in Bulgaria is also not sufficiently developed as according to the values of the 

component in DESI index, the country ranks on last place amongst the other EU member-states. Regarding 

the component “digital skills of the human capital”, Bulgaria ranks second to the last Romania. According 

to the value of the indicator, 12.4 % of the population of the country possesses basic skills for using Internet 

and 20 % of the citizens have acquired specific digital skills. It is observed a slight increase by 8 % in the 

values of the component in 2022 in comparison to 2017, which means that business organizations do not 

allocate sufficient financial resources for reinvestments in better qualifications and skills of their personnel 

and there is no targeted government policy for acquiring new or improving the existing digital skills among 

the population.  

 

EMPIRICAL ANALYSIS, RESULTS, AND DISCUSSION  

 

The financial performance of air passenger carriers will be examined through the statistical analysis 

of a system of indicators, including short-term liquidity rate, return on capital, revenues per employee and 

financial indebtedness. For the purposes of the statistical analysis, it is made a representative sample of the 

licensed air carriers on the territory of Bulgaria who possess a valid Operating License of Community air 

carrier in Category A: Air Volta, Avio Start, B H Air, Bulgaria Air (the national carrier of Bulgaria), 

FLY2SKY and GULIVAIR. 

On table 1 they are presented the trends in the development of the indicator „short-term liquidity 

ratio“ of Bulgarian aviation operators. 

 

Table 1. Short-term liquidity ratio of  Bulgarian aviation operators 

  2016 2017 2018 2019 2020 2021 

Air Volta 3.566 2.617 3.033 0.791 0.217 0.588 

Avio Start 1.012 1.072 1.164 1.415 1.202 2.305 

B H Air 0.777 0.928 1.669 1.129 1.092 1.062 

Bulgaria Air 0.97 1.269 1.009 0.821 0.382 0.323 

FLY2SKY 3.92 0.906 0.537 0.93 0.485 0.464 

GULIVAIR 2.443 5.565 0.385 3.763 1.796 0.493 
Source: Annual Financial Reports of the Licensed Air Passenger Carriers for the period 2016-2021 

 

The short-term liquidity ratio is an important financial indicator and is especially useful for analyzing 

airline companies, as they are in general capital-intensive and have significant amounts of debt. The 

information on table 1 shows that for the period 2019-2021 – during the COVID-19 pandemics most of the 

0

10

20

30

40

50

60

2017 2018 2019 2020 2021 2022

DESI index total and in separate components

Bulgaria (DESI index total) EU (DESI index total)

e-commerce (BG) deployment of ICT by the business (BG)

digital skills of human resources (BG)

https://digital-agenda-data.eu/


Petya Koralova-Nozharova / Finance, Accounting and Business Analysis, Volume 5, Issue 1, 2023 

54 

 

air passenger carriers have values under 1. Only for the carriers Avio Start and B H Air, the short-term 

liquidity ratio is around 1. It is observed a serious decline in the values of the indicator and in 2021 a drop 

by between 70 % and 90 % is reported for the air carriers Air Volta (-84 %), Bulgaria Air (-67 %), FLY2SKY 

(-89 %) and GULIVAIR (-80 %) compared to 2017. The observed high values of the indicator (from 2.4 to 

5.6) for GULIVAIR for the period 2016-2019 are determined by the fact, that in this time the air carrier has 

not performed operation activity, as the company has acquired its license in the end of 2020. In this period 

the persons, employed by the aviation operator are 8 workers and the aircraft consisted of only one plane, 

while in 2021, the number of the employees grew 9 times (72) and that of planes grew 6 times (GULIVAIR 

2022). The observed trends are due first to the significant drop in the volumes of passenger carriages, which 

volume only for the national air carrier is decreasing 20 times because of the pandemics. Second, except for 

Bulgaria Air, the rest aviation operators form their revenues and passenger turnovers based on seasonal 

charter flights operation, which operations were strictly forbidden during the COVID-19 pandemics (for 

some of the carriers, these drops were between 3 and 13 times) and at the end of 2022 and at the beginning 

of 2023 these flights started hardly to recover since pre-pandemic levels. Third, due to the imposed travel 

restrictions because of the health crisis in global, European, and national level, the liabilities of Bulgarian 

aviation companies to the personnel, creditors and external resources began to constantly increase in the 

expense of lack of incomes. 

 

 
Source: Annual Financial Reports of the Licensed Air Passenger Carriers for the period 2016-2021  

Figure 2. Trends in the development of  Return on capital of  Bulgarian aviation operators for the period 

2016-2021 

 

As one can see on figure 2, the indicator return on capital is taking values under 1 and during the 

COVID-19 pandemics its values are negative. This means that with the available material (aircraft, 

equipment), human (personnel, directly engaged with passenger carriages operation) and information 

resources Bulgarian aviation operators could not make profit and they strongly depend on crediting from 

external sources. For example, in 2021 only for Air Volta, Avio Start and GULIVAIR they are observed 

positive values of  the indicator, although they are far below 1 but they give a signal that carriers are starting 

gradually to recover their financial performance from the health and economic crisis. The values of  the 

indicator for the national carrier Bulgaria Air also show a recovery trend as the return on capital increases 5 

times in 2021 compared to 2019. The observed trends in the development of  the indicator characterize the 

inability of  Bulgarian air carriers to maintain their fleet in accordance with the technological innovations in 

the sector, as well as they are unable to improve the qualification and skills of  their personnel regarding the 

modern trends in the digital transformation of  economic sectors. It also gives information that the 

developments in the material and human resources of  aviation operators do not bring financial benefits for 

the companies and they are not effective – this fact is confirmed also by the reported drop in the values of  

the coefficient in 2021 compared to 2016, as for Air Volta return on capital decreases by 86 %, for B H Air 

– by 9 times, for FLY2SKY by 26 % and for GULIVAIR by 116 %. 

Another indicator, which directly corresponds to the financial performance of  air passenger carriers 

is the revenues per employee. On figure 3 one can see the trends in the development of  the indicator for the 

period 2016-2021. 

-40

-20

0

20

40

60

80

2016 2017 2018 2019 2020 2021

Return on capital of  Bulgarian aviation operators

Air Volta Avio Start B H Air Bulgaria Air FLY2SKY GULIVAIR



Petya Koralova-Nozharova / Finance, Accounting and Business Analysis, Volume 5, Issue 1, 2023 

55 

 

 
Source: Annual Financial Reports of the Licensed Air Passenger Carriers for the period 2016-2021  

Figure 3. Trends in the development of  the revenues per employer of  Bulgarian aviation operators 

 
The indicator revenues per employee accurately reflects the labor productiveness of personnel, 

employed by aviation operators. The values of the indicator are negative during the period of the health and 

financial crisis because of COVID-19 pandemics (its values are between -65 and 3). In this period a lot of 

companies in most of the economic sectors were funded through the state measures 60:40 in order to keep 

their personnel employed on the one hand and on the other – to ensure some kind of payment for the human 

labor and to compensate the impossibility for them to carry out their routine tasks because of the imposed 

restrictions on flights inn national, European and global aspect. As it was mentioned previously, the COVID-

19 pandemics accelerates the digitalization processes of economic activities, which forces companies to hire 

workers with high professional qualification, possessing basic and specific digital skills and performing 

higher labor productiveness rates. Obviously, the statistical data provided on figure 4 shows that Bulgarian 

air carriers do not have enough qualified and skilled personnel who would successfully meet the 

requirements of the digital revolution, as the revenues per employee have strongly decreased during the 

studied period. There is a significant drop in the labor productiveness rate of employees as for most of the 

aviation operators it is between 96 % and 120 % in 2021 compared to 2017 and to 2019. 

Financial indebtedness is another important indicator which represents the ability of economic agents 

to cover their liabilities with or without the help of creditors (Hristozov 2021). On table 2 they are presented 

the trends in the development of the indicator for the period 2016-2021. 

 

Table 2. Trends in the development of  the financial indebtedness indicator of  Bulgarian aviation operators 

  2016 2017 2018 2019 2020 2021 

Air Volta 0.302 0.503 0.437 2.088 3.953 5.025 

Avio Start 14.493 4.831 0.798 1.01 1.451 1.664 

B H Air -25 -5.435 90.909 45.455 90.909 500 

Bulgaria Air 2.558 1.138 1.136 2.268 2.538 3.509 

FLY2SKY 0.0305 4.926 29.412 16.129 -2.695 3.279 

GULIVAIR 0.444 0.176 -10.87 0.366 1.887 2.793 

Source: Annual Financial Reports of the Licensed Air Passenger Carriers for the period 2016-2021  

 

For all the investigated carriers, the values of the indicator are many times higher than 1, which 

express a high degree of dependence of these companies on their creditors and inability to cover their 

liabilities by own capital resources. This is not a good example of an appropriately carried financial policy 

by the aviation operators, since any modernization of the aircraft in accordance with the modern digital 

-150

-100

-50

0

50

100

150

2016 2017 2018 2019 2020 2021

Revenues per employee of  Bulgarian aviation operators

Air Volta Avio Start B H Air Bulgaria Air FLY2SKY GULIVAIR



Petya Koralova-Nozharova / Finance, Accounting and Business Analysis, Volume 5, Issue 1, 2023 

56 

 

technologies, as well as any improvement of labor conditions and labor qualification will increase the 

liabilities of air carriers to creditors and there is a risk the operators to fall into a debt spiral. The greatest 

fluctuations in the development of the indicator are observed for the aviation operator B H Air, where the 

values of the indicator from -25 in 2016 have reached values of 500 in 2021. This trend is determined by 

some of the following circumstances: first, after 2019 the air carrier has not made any profit and the number 

of passengers carried have decreased to 305 in 2020 compared to 226727 in 2016 (Directorate General Civil 

Aviation Agency  2023b). Second, according to the annual reports of the company, it ranked on 2nd place in 

terms of liabilities amongst 74 companies in the sector and in terms of availability of equity capital it ranked 

on 16th place (Registry Agency 2023b). Third, obviously for the air carrier it is difficult to compete with the 

other air carriers the sector on the domestic and international aviation markets, since both indicators 

“duration of one turnover” (2077 days for 2021 year) and the number of turnovers per year (0.17) are far 

below the industry average levels - 298.4 days for one turnover for 2021 and 1.21 turnovers respectively 

(Registry Agency 2023c). Similar trend is also observed for the air carrier FLY2SKY, as higher values for 

the indicator “financial indebtedness” are reported for the period 2018-2019. Like B H Air, FLY2SKY is 

also operating seasonal charter passenger flights, but after 2019 the operator has differentiated its main 

economic activity and since then it has been providing wet and damp leasing (ACMI services) and as a result 

the financial indebtedness of the air carrier has started to decrease (FLY2SKY 2022). Moreover, even in 

2021, the passengers carried by the air operator FLY2SKY are 4 times more than those carried by B H Air 

(Directorate General Civil Aviation Agency 2023b). For example, in 2021 the values of the indicator for Air 

Volta have increased to 5.02 in comparison to 2016 when the values of the indicator were under 1. A similar 

trend is observed for GULIVAIR (from 0.44 in 2016 financial indebtedness grows to 2.8 in 2021) and 

FLY2SKY (from 0.03 in 2016 the indicator has reached values of 3.3 in 2021). Only for the national carrier 

Bulgaria Air the financial indebtedness coefficient presents well, and its values are around 1, however during 

the COVID-19 pandemics the company’s available equity is insufficient to cover the liabilities and the 

dependance of the operator on creditors is increasing.  

Based on the empirical analysis of the indicators, characterizing the financial performance of 

Bulgarian air passenger carriers and on the degree of digitalization of the main economic processes in the 

country, there will be applied an econometric model for establishing a correlation between these two 

phenomena. In this regard a regression analysis will be applied, where the independent variables are return 

on capital, revenues per employee, financial indebtedness and short-term liquidity ratio and the dependent 

variable is deployment of ICT by the business. When the multiple regression analysis was processed, the 

phenomena “multicollinearity” was found, which means that there is interdependence amongst the 

independent variables. This is logical as most of the selected independent variables are calculated by using 

the same unit in the numerator or in the denominator fraction bar. Because of that, one-factor linear 

regression is applied in order to be determined which of the independent variables most strongly influences 

the dependent variable. Figure 4 presents the results of the linear regression processed. 

 

SUMMARY OUTPUT        
Regression Statistics        

Multiple R 0.930167        
R Square 0.865211        
Adjusted R Square 0.831513        
Standard Error 0.429412        
Observations 42        

         
ANOVA         

  df SS MS F Significance F    
Regression 1 4.734505 4.734505 25.67593 0.007145    
Residual 4 0.737579 0.184395      
Total 5 5.472083          

         

  Coefficients 

Standard 

Error t Stat P-value Lower 95% 

Upper 

95% 

Lower 

95.0% 

Upper 

95.0% 

Intercept 13.39976 0.534411 25.0739 1.5E-05 11.916 14.88352 11.916 14.88352 

X Variable 1 -0.2946 0.058139 -5.06714 0.007145 -0.45602 -0.13318 -0.45602 -0.13318 

Source: author’s own calculations 

Figure 4. Correlation between „short-term liquidity ratio“ and „deployment of  ITC by the business“ 
 



Petya Koralova-Nozharova / Finance, Accounting and Business Analysis, Volume 5, Issue 1, 2023 

57 

 

Based on the results obtained, it is obvious that a linear correlation between the independent variable 

“short-term liquidity ratio” and the dependent variable “deployment of ITC by the business” exists. This is 

confirmed by the values of Multiple R = 0.93 %, as well as by the values of Sig. F = 0.007, which is far lower 

than α (0.05) and they allow to interpret the results. The R Square is 0.865, which means that approximately 

87 % of the changes in the value of “deployment of ICT by the business” could be explained by changes in 

the value of “short-term liquidity ratio” of Bulgarian air passenger carriers. Based on the information 

presented on figure 6, an equation of the correlation between the variables could be established and it is as 

follows: 

 

Ydeployment of ICT by the business = 13.399 −  0.295 ∗ Xshort−term liquidity ratio +  ε   (1) 

 

The equation shows that if the values of the coefficient „short-term liquidity ratio” decrease by one 

point, compared to the previous reporting period, then the financial possibilities of the air carriers for 

deploying ICT will grow by 0.3 points. Consequently, if the observed trends for the development of the 

indicator “short-term liquidity ratio” in the period 2019-2021 are maintained and they change almost at the 

same rate in the next five years for the aviation operators Bulgaria Air, FLY2SKY and GULIVAIR (see 

table 1), then the share of deployed digital technologies by them will grow every year.   
 

CONCLUSION 

 
The purpose of the present study was first to evaluate the financial performance of Bulgarian aviation 

operators in the conditions of global digital transformation and second to examine if there is a correlation 

between these two phenomena. The literature review showed that in the field of air transportation services 

digitalization there is many scientific studies, however very few of them are trying to determine how the 

financial performance of air carriers influence the degree of information and communication technologies 

deployment in their main economic activity. 

As a result of the empirical analysis of Bulgarian aviation operators’ financial performance, the 

following could be summarized: 

 Air passenger carriers are not financially capable to cover their main liabilities to the personnel 

and creditors in the short run. This is confirmed by the values of the short-term liquidity ratio, 

financial indebtedness coefficient and the return on capital (tables 1 and 2, fig. 2); 

 The values of the indicator „revenues per employee “correspond with low labor productiveness 

rates, as they are not only lower than 1 but they are also negative. This fact will put a serious 

dilemma to the aviation operators in the near future whether to invest financial resources in 

qualification and digital skills improvement of the employees and keeping their number or to 

replace low-qualified employees with artificial intelligence (fig. 3); 

 The unsatisfactory values of the return on capital coefficient correspond with inefficiency of the 

economic activity carried out by the Bulgarian air carriers.  

 Bulgaria ranks on the last place according to the values of the DESI index, compared to the EU 

average levels. The country is also on the last place amongst the other EU member-states, 

concerning acquired digital skills by workers, deployment of ICT by the business and e-commerce 

(fig. 1); 

 Based on the regression analysis applied, a statistically significant correlation between financial 

performance of aviation operators (expressed by the short-term liquidity ratio) in the short-run and 

the degree of ICT deployment exists.  

Certainly, the financial performance of Bulgarian air passenger carriers is determined by high 

indebtedness rates to creditors, inability to cover their short-term liabilities by the existing human, material 

and information resources, low labor productiveness rate and insignificant volumes of passenger carriages. 

These factors will create obstacles for the process of digital transformation of the sector. In this regard, the 

national government will need to undertake appropriate policies to support the air passenger transport to 

overcome the exogenous shocks that have arisen (COVID-19 pandemics, the ongoing military conflict in 

Ukraine, the geopolitical relations in the Black Sea region). On the other hand, the European Commission 

is also trying to ensure financial support for the development of the aviation sector and most of the calls and 

mechanisms are open to all member-states. For example, through the mechanisms of SESAR III and Clean 

Aviation Partnership for the period 2021-2027 the Commission will allocate 3.4 billion euros to support 

implementation of hybrid and electric aircraft (ACI Europe 2023). The Innovation Fund is another 

opportunity for the air carriers, which main purpose is to support the development of sustainable and 

environmentally friendly transport modes. Through the mechanisms of the National Recovery and 

Resilience Plan, Bulgarian air passenger carriers could receive financial support by the envisaged social 



Petya Koralova-Nozharova / Finance, Accounting and Business Analysis, Volume 5, Issue 1, 2023 

58 

 

policy for issuing vouchers for acquiring new or development of existing digital skills by the employees. The 

European Investment Bank is another source of financial support which credits and supports activities, 

related to the development of sustainable aviation.   

The present study could serve as basis for performing similar research both in the field of financial 

performance of other transport modes or for aviation companies, licensed in other member-states or third 

countries with similar economic and political characteristics like Bulgaria.  

 

 

REFERENCES 

 

Airports Council International Europe. 2019. SESAR and the digital transformation of Europe’s Airports. 

Retrieved from: 

https://www.sesarju.eu/sites/default/files/documents/reports/SESAR%20and%20the%20digital

%20transformation%20of%20europe%20airports.pdf. 

Airports Council International Europe. 2023. The price of net zero. Aviation investments towards 

Destination 2050. Research Reports. Authors: Martin Adler, Bram Peerings, Thijs Boonekamp, 

Elisabeth van der Sman, Nanette Lim, Arnout Jongeling, Sacha Pel. Amsterdam. 

Bulgaria Air. 2023. General information about the company. Statistics. Retrieved from: 

https://www.air.bg/bg/za-bylgarija-er/za-nas. 

Büyüközkan, G., C. A. Havle, and O. Feyzioğlu. 2021. Digital competency evaluation of low-cost airlines 

using an integrated IVIF AHP and IVIF VIKOR methodology. Journal of Air Transport Management, 

91, 101998. https://doi.org/10.1016/j.jairtraman.2020.101998. 

DESI index. 2022. DESI by components. Retrieved from https://digital-agenda-data.eu/charts/desi-

components#chart={%22indicator%22:%22desi%22,%22breakdown-

group%22:%22desi%22,%22unit-measure%22:%22pc_desi%22,%22time-period%22:%222022%22}. 

Directorate General Civil Aviation Agency. 2023a. List of the air carriers with a valid Operating License of 

Community air carrier. Retrieved from 

https://www.caa.bg/en/category/288/3207https://www.caa.bg/en/category/288/3207. 

Directorate General Civil Aviation Agency. 2023b. Statistical information about Bulgarian aviation 

operators. Retrieved from https://www.caa.bg/en/node/17286.  

European Commission. 2020. Sustainable and Smart Mobility Strategy – putting European transport on 

track for the future. Retrieved from: https://eur-lex.europa.eu/legal-

content/EN/TXT/?uri=CELEX%3A52020DC0789. 

European Parliament. 2019. COMMISSION IMPLEMENTING REGULATION (EU) 2019/947 of 24 

May 2019 on the rules and procedures for the operation of unmanned aircraft. Retrieved from: 

https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32019R0947.  

EUROSTAT. 2023a. Passenger air transport over national territory (including territorial sea) - million 

passenger-km. Retrieved from 

https://ec.europa.eu/eurostat/databrowser/view/AVIA_TPPA/default/table?lang=en; 

EUROSTAT. 2023b. Air transport of passengers by country (yearly data). Retrieved from 

https://ec.europa.eu/eurostat/databrowser/view/TTR00012/default/table?lang=en. 

Fontanet-Pérez, P., X. H. Vázquez, and D. Carou. 2022. The impact of the COVID-19 crisis on the US 

airline market: Are current business models equipped for upcoming changes in the air transport 
sector? Case Studies on Transport Policy, 10(1), 647-656. https://doi.org/10.1016/j.cstp.2022.01.025. 

FLY2SKY. 2022. Information about the company. About us. Our fleet. Retrieved from 

https://www.fly2sky.aero/about.  

GULIVAIR. 2022. Main information about the company. About us. Main fleet. Retrieved from 

https://gullivair.com/#.  
Hristozov, Y. 2021. Liquidity of Non-financial Corporations: Evidence from Bulgaria. Economic Alternatives, 

1(3), 389-406. DOI: https://doi.org/10.37075/EA.2021.3.04. 

International Air Transport Association. 2019. Aircraft Technology Roadmap to 2050. Retrieved from: 

https://www.iata.org/contentassets/8d19e716636a47c184e7221c77563c93/Technology-roadmap-

2050.pdf. 

International Air Transport Association. 2022. Quarterly Air Transport Chartbook. IATA Economics. 

Retrieved from https://www.iata.org/en/iata-repository/publications/economic-reports/quarterly-

air-transport-chartbook---q4-2022/. 

International Air Transport Association. 2023. Information about the introduction of One ID. Retrieved 

from: https://www.iata.org/en/programs/passenger/one-id/. 
La, J., C. Bil, and I. Heiets. 2021. Impact of digital technologies on airline operations. Transportation Research 

Procedia, 56, 63-70. DOI: 10.1016/j.trpro.2021.09.008. 

https://www.sesarju.eu/sites/default/files/documents/reports/SESAR%20and%20the%20digital%20transformation%20of%20europe%20airports.pdf
https://www.sesarju.eu/sites/default/files/documents/reports/SESAR%20and%20the%20digital%20transformation%20of%20europe%20airports.pdf
https://www.air.bg/bg/za-bylgarija-er/za-nas
https://doi.org/10.1016/j.jairtraman.2020.101998
https://digital-agenda-data.eu/charts/desi-components#chart={%22indicator%22:%22desi%22,%22breakdown-group%22:%22desi%22,%22unit-measure%22:%22pc_desi%22,%22time-period%22:%222022%22}
https://digital-agenda-data.eu/charts/desi-components#chart={%22indicator%22:%22desi%22,%22breakdown-group%22:%22desi%22,%22unit-measure%22:%22pc_desi%22,%22time-period%22:%222022%22}
https://digital-agenda-data.eu/charts/desi-components#chart={%22indicator%22:%22desi%22,%22breakdown-group%22:%22desi%22,%22unit-measure%22:%22pc_desi%22,%22time-period%22:%222022%22}
https://www.caa.bg/en/category/288/3207https:/www.caa.bg/en/category/288/3207
https://www.caa.bg/en/node/17286
https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A52020DC0789
https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A52020DC0789
https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32019R0947
https://ec.europa.eu/eurostat/databrowser/view/AVIA_TPPA/default/table?lang=en
https://ec.europa.eu/eurostat/databrowser/view/TTR00012/default/table?lang=en
https://doi.org/10.1016/j.cstp.2022.01.025
https://www.fly2sky.aero/about
https://gullivair.com/
https://doi.org/10.37075/EA.2021.3.04
https://www.iata.org/contentassets/8d19e716636a47c184e7221c77563c93/Technology-roadmap-2050.pdf
https://www.iata.org/contentassets/8d19e716636a47c184e7221c77563c93/Technology-roadmap-2050.pdf
https://www.iata.org/en/iata-repository/publications/economic-reports/quarterly-air-transport-chartbook---q4-2022/
https://www.iata.org/en/iata-repository/publications/economic-reports/quarterly-air-transport-chartbook---q4-2022/
https://www.iata.org/en/programs/passenger/one-id/


Petya Koralova-Nozharova / Finance, Accounting and Business Analysis, Volume 5, Issue 1, 2023 

59 

 

Paprocki, W. 2021. Virtual Airport Hub—A New Business Model to Reduce GHG Emissions in 
Continental Air Transport. Sustainability, 13(9), 5076. 

Raghavan, S., and C. Yu. 2021. Evaluating financial performance of commercial service airports in the 
United States. Journal of Air Transport Management, 96, 102111. 

https://doi.org/10.1016/j.jairtraman.2021.102111. 

Registry Agency 2023a. Annual reports of the national air carrier of Republic of Bulgaria. Retrieved from 

https://portal.registryagency.bg/en/statistic-cr. 

Registry Agency 2023b. Annual reports of the air carrier B H Air Ltd. Retrieved from 

https://www.bulstat.bg/bg/view/spravki.  

Registry Agency 2023c. Annual reports of air carrier FLY2SKY. Retrieved from 

https://www.bulstat.bg/bg/view/spravki.  

ReFuel EU. 2023. Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE 

COUNCIL on ensuring a level playing field for sustainable air transport. Retrieved from: https://eur-

lex.europa.eu/legal-content/EN/ALL/?uri=CELEX:52021PC0561. 

SESAR Joint Undertaking. 2019. Digital European Sky. Blueprint. Publication Office of the European 

Union. Luxembourg. 
Van Winkel, C. (2023). Tactical Taxibot Planning at Amsterdam Airport Schiphol under Uncertainty. Delft 

University of Technology, Retrieved from:  

https://repository.tudelft.nl/islandora/object/uuid:0f6dc9bb-52db-49ce-b852-5d5754b9d3bc. 

WNS Global Services. 2018. Top trends for the global airline industry. Retrieved from 

https://www.wns.com/perspectives/articles/articledetail/598/top-trends-for-the-global-airline-

industry. 
Zaharia, S. E., and C. V. Pietreanu. 2018. Challenges in airport digital transformation. Transportation research 

procedia, 35, 90-99. DOI: 10.1016/j.trpro.2018.12.016. 

 

 

https://doi.org/10.1016/j.jairtraman.2021.102111
https://portal.registryagency.bg/en/statistic-cr
https://www.bulstat.bg/bg/view/spravki
https://www.bulstat.bg/bg/view/spravki
https://eur-lex.europa.eu/legal-content/EN/ALL/?uri=CELEX:52021PC0561
https://eur-lex.europa.eu/legal-content/EN/ALL/?uri=CELEX:52021PC0561
https://repository.tudelft.nl/islandora/object/uuid:0f6dc9bb-52db-49ce-b852-5d5754b9d3bc
https://www.wns.com/perspectives/articles/articledetail/598/top-trends-for-the-global-airline-industry
https://www.wns.com/perspectives/articles/articledetail/598/top-trends-for-the-global-airline-industry

