Aviation News

February 3, 2012

Malev Grounds All Flights, Ending 66 Years as Hungary’s Flag Carrier

A Malev 737-600 HA-LOE and its signature blue nose on short final for Amsterdam.
A Malev 737-600 (HA-LOE) and its signature blue nose on short final for Amsterdam. (Photo by Joop Stroes)
Malev, the government-owned national airline of Hungary, ended operations Friday morning, the culmination of weeks teetering on the edge of insolvency.

Hungary’s Prime Minister Viktor Orban said vendors had begun demanding advanced payment for fuel and services. The final nail was hammered when two planes were not allowed to depart Tel Aviv and Dublin due to unpaid bills.

Founded in 1946 as the Hungarian-Soviet Civil Air Transport Joint Stock Company, Budapest-based Malev was privatized in 2007, only to be re-nationalized a few years later. Facing stiff competition from up-and-coming low-cost carriers, Malev downsized and cut all overseas flying over the past few years. Flights to North America were replaced by service aboard Malev’s oneworld alliance partners.

On January 9th, the European Union ruled that Malev had received illegal government subsidies and ordered repayment of $400 million to the government. The airline soon announced that it would be unable to continue operations without additional, legal subsidies from the government or outside investment, but the interested parties, which were rumored to include Iberia and Qatar Airways, were unable to reach a funding agreement.

Having apparently been circling the dying Malev for some time, Ryanair almost instantly pounced on 26 of the 27 Budapest routes left uncontested by Malev, and later in the day announced that it would open a new base in Budapest, promising to employ 2,000 canned Malev workers. Wizz Air and Air Berlin soon announced new Budapest services of their own on Friday.

All three airlines are offering rescue fares to the approximately 7,000 Malev passengers left stranded.