Hungarian national airline Malév shuts down

Hungarian national airline Malév collapsed into insolvency on Friday, ceasing all flights after more than 60 years of operations and stranding thousands of passengers in Budapest and cities as far away as Israel.

Passengers at Budapest airport were informed this morning at 7:00 a.m. that all outbound flights were cancelled.

"Unfortunately, what we feared the most and did everything to avoid has come to pass," the company said in a statement. "Although until recently there still has been hope that the operation could continue and passengers still fully trusted us, news reports in the recent few days have caused our service partners to lose trust and overnight began to demand advance payments for their services. This has accelerated our cash outflow to such an extent that the airline's liquidity situation has become unsustainable. It is also known that the owner, despite its best efforts, cannot continue to provide financial resources for our operation after the EU's negative decision. In light of all the above, the Board has decided to end the operation of the Hungarian national airlines. We apologize to all our passengers."

In a communique published on malev.com the company said that ticket holders would be informed by customer services about alternate travel arrangements and compensation.

Individuals impacted by the shutdown can call the following phone numbers: 06-40-21-21-21 from within Hungary, and +36-802-11-11 from outside the country.

On Tuesday the government issued a decree providing assistance to any passengers who purchased tickets for flights scheduled no more than three days after a shutdown in operations, as well as those who have traveled abroad with the airline and who are scheduled to return before the end of February.

International airlines step in

Several international airlines later responded to Malev's shutdown by increasing capacities to help stranded passengers and offering ticket transfers on prior Malév bookings. Currently over 3,700 passengers who had flown abroad with the carrier are waiting to return to Hungary.

Low-cost airline Ryanair said it would transfer 4 Boeing aircraft to Budapest and open its Budapest base within two weeks, flying to 31 destinations. Michael Cawley, the airline's deputy chief executive, said job applications from Malév employees were welcome.

Ryanair announced in January it would re-launch flights from Budapest to five destinations, but now plans are for increased capacity.

Air France-KLM said it would offer alternative travel arrangements for passengers who have booked flights they code-shared with Malev, Air France's press office told MTI. The French airline plans to increase capacity on the three remaining flights to Budapest to accommodate for increased needs, it added.

British Airways (BA) is considering "all possibilities" in connection with helping Malev passengers, communications director Anthony Cane told MTI. BA operates three flights a day from Heathrow to Budapest and the airline is considering putting larger aircraft in service on this route and re-booking Malev passengers onto BA flights, Cane said.

Budget airlines easyJet and Wizz Air have both offered reduced fares and re-booking Malev tickets. EasyJet's offer is for Paris, London and Berlin flights and is valid until midnight February 9, the airline said.

Wizz Air director Jozsef Varadi said earlier in the day that it would increase capacity for Budapest flights, offering 5 daily services instead of the current 3. He added that the company would also fly from Budapest to Bucharest as a new destination.

The Czech airline CSA will increase aircraft capacity on its Friday evening flight from Prague to Budapest to help stranded passengers, CSA said.

Polish airline LOT, Belgian Brussels Airlines, German Lufthansa and Austrian Airlines have indicated they are considering increasing capacities or the frequency of flights to Budapest.

German airlines Lufthansa said it was examining the possibility of using increased capacity aircraft on services to Munich and Frankfurt.

Austrian airlines AUA will operate a flight between Budapest and Vienna with a bigger capacity, spokesman Michael Braun said.

The European Commission said on Friday that it would grant assistance to Hungarian authorities to resolve the situation. Transport spokeswoman Helen Kearns said the most important matter was to ensure that passengers' rights are respected and EU regulations are followed.

Orbán says new Hungarian airline possible

In an radio interview this morning Prime Minister Viktor Orbán said it was "not impossible" that a new Hungarian airline could rise in the ashes of Malév, which had been flying for 66 years.

"If we can get rid of these skeletons in the cupboard we inherited from the past, there yet could be another Hungarian national airline" Orbán said, adding that investors are not crowding the European aviation market at the moment due to the economic crisis in Europe.

However, if there is an investor willing to undertake the risk to operate a national carrier profitably or at least without making a loss, then a new company will be set up, Orbán said.

He added that "disaster struck" when the European Union had decided that the Hungarian government was not allowed to provide further financial assistance to Malév.

The status of passengers who scheduled their flights for the coming months are still unclear, Malév CEO János Berényi told a press conference.

Berényi said passengers eligible for refunds should call Malév's customer service hotline and will need to fill out a refund request form.

Malév's administrator, who was appointed earlier this week, said the company's management will convene in the next few days and propose on a plan for settlement but he stopped short of saying how much the airline is owing to partners, employees and passengers. He added that the last two will be in a preferential position.

As of this morning three Malév planes were still "stranded" aboard, one in Tel-Aviv, Israel and another in Ireland, while this afternoon it was reported that the company Malév had leased its aircraft from had begun to fly the defunct airline's aircraft out of Hungary, despite the apparent refusal of some Malév pilots to assist in the repossession.

Editor's Note: We will be updating this report, which is based on reports from MTI and elsewhere, as further information becomes available. Meanwhile, any readers who wish to comment on the story can do so on our sister website Pestiside.hu, or on the All Hungary Media Group Facebook page.

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