Italian private airlines Volare and Air One have shown interest in the planned privatization of Bulgaria's flag carrier Bulgaria Air, Italy's Deputy Industry Minister Adolfo Urso said on Monday.

European Union candidate Bulgaria aims to sell up to 100 percent of its national carrier, launched in December 2002 to succeed insolvent air carrier Balkan Airlines, as part of structural reforms and to inject cash into the company.

The government approved a sell-off strategy for Bulgaria Air last year but it is yet to launch the privatization procedure as it is pending parliamentary approval.

"The two (Italian) companies would be able to submit bids for Bulgaria Air this year," Bulgarian Transport Minister Nikolai Vassilev told National Radio after a meeting with Urso.

Under the sell-off plan the company would be sold in a two-stage tender, with a majority stake earmarked for domestic investors, which would allow Bulgaria Air to operate as a national carrier.

But analysts say that if Bulgaria joins the European Common Aviation Area by the year-end as planned, the issue of the "national carrier" would lose its importance because the aviation market would be liberalized.

Bulgaria Air generated a pretax profit of 1.1 million levs (USD$714,000) for January-September instead of an initially expected loss due to limited number of destinations in the first months of its operation.

Bulgaria Air now flies to 14 destinations in Europe with a leased fleet of two Boeing 737-300s and two Boeing 737-500s.

Last month the company said it planned to lease four more Boeings and add two more international destinations this spring.

(Reuters)