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HUNGARY. Malev, the national airline of Hungary, ceased operations this morning in a bid to “minimise its losses,” the company said. It has been trading for 66 years.
Malev CEO Loránt Limburger said in a statement: “Unfortunately, the event of which we had the greatest fear, and which we wanted to avoid, has occurred. Until the [last few] days there were prospects to continue operations [but] our partners lost their trust.
“They started to ask for payment of their services in advance. This speeded up the cash outflow and the situation of the airline became untenable. It is also known that the owner [majority shareholder Hochtief plus partners* – Ed], despite the best intentions, is unable to provide additional financial resources to operate. Considering all of this the Board decided to order the cease of operation of Hungary’s national airline. We apologise to all of our passengers.”
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Malev’s closure is sure to have a big impact on Budapest Airport, which opened its new SkyCourt last March |
A major factor in closing the airline was an order by the European Commission last month that it should repay millions of dollars worth of state aid received between 2007 and 2010, the equivalent of its entire 2010 revenue.
According to Reuters, the airline accounts for around 40% of Budapest Airport’s turnover – and the move is sure to have a major impact on the airport’s commercial activities.
Airport spokesman Mihaly Hardy told Reuters: “If this situation continues for a longer period of time, then we will obviously have to revise our business plans for this year and all our contractual obligations. There are some estimates that over 20 routes of Malev will never be served by other airlines.”
*Budapest Airport is owned by a consortium of German (KfW IPEX-Bank 4%) Canadian (Caisse de depôt et placement de Québec 18.167%), American (Aero Investment 10%) and Singaporean (Malton Investments Pte Ltd. 18.167%) investors led by HochTief AirPort GmbH (49.666%). The airport handled 8.2 million passengers travelling to more than 92 destinations in 40 countries in 2010.
