A statement from the Malev Board on their website states:
2012. 01. 30
During today’s meeting of the Board of Directors, Chief Executive Officer of Malév Lóránt Limburger informed the Board that despite the continually improving commercial results the financing of activities had become unviable and was unresolved from the end of January. At the same time, talks with ILFC on Friday had proved successful after agreement was reached that the American leasing corporation would continue to make the aircraft available for continuous operations.
In the interest of ensuring continuous operations, Chairman of the Board of Directors Dr. János Berényi requested Malév management to draw up – by the end of the week – a liquidity plan for the immediate future.
After discussing the Malév report the Board of Directors approached the owners with a request to do everything possible to resolve the situation, even though the Board recognized that due to the EU Commission ruling reached in January concluding that financing provided between 2007 and 2010 was unlawful state support, which further burdens the company’s heritage, the room for manoeuvre of the government is extremely limited.
Hungary’s Malev Cedes Spending Control to Bankruptcy Trustee
February 02, 2012, 6:19 AM EST
Feb. 2 (Bloomberg) -- Hungarian national airline Malev Zrt., weighed down by debts of 60 billion forint ($270 million), no longer has control over its own spending plans after a court appointed a bankruptcy trustee to oversee the company.
Outgoing payments must be approved by the state-owned, non- profit liquidator, Hungary’s Development Ministry said.
The court also granted a moratorium stopping business partners from suspending Malev’s contracts and extending its aviation permits.
“The bankruptcy trustee will only approve payments that are needed for the continued and orderly operation of the airline,” the ministry said in a statement, adding that the moratorium provides “a security similar to bankruptcy protection,”
Malev has until tomorrow to submit a survival plan to the trustee or face being grounded.
European nations are becoming reluctant to back carriers as the debt crisis forces cost cuts in other parts of the economy, with Spanair SA ceasing flights Jan. 27 after the Catalonia regional government halted funds.
Malev aims to sustain liquidity and continue flying through an orderly bankruptcy that would allow it to be restructured or a successor established, Chairman Janos Berenyi said on Jan. 31.
The executive said there are potential buyers for the carrier and that a bid from HNA is “not impossible.”
Malev, which was declared a “strategically important company” by the Hungarian government on Jan. 30, shielding it from creditors,
will hold a press conference at 2 p.m. in Budapest today to provide an update on its situation.
Wow. That is news. The airline industry starts to live up to that song by Queen: "... and another one gone, another one gone, another one bites the dust...". When national carriers like Malev (even when taking into consideration that MAH wasn't exactly profitable for ages and had to be sustained by government money) start falling, it looks like the end of troubles is nowhere in sight... by far! In the end, it was the government funding that did them in, as European rules (something the Hungarian government is at odds with more regularly of late) forced Malev to repay these, leaving little or no confidence in the ability to overcome it's cash-flow problems. A sad day; can't see much candidates for a take-over...
And last week it was Spanair, not a national carrier but still a considerable one. However, it's not new: remember Swissair and SABENA, more recently Alitalia and JAL, plus of course the ongoing reduction in major US carriers...
phkza wrote:On the other hand. Malèv has a strong brand in the region, so maybe a carrier like TK might step in, like they're planning to do with LOT...
Problem is that Malèv's financial position is seriously worse than LOT's. Any takeover would require immediate funding of the debt Malèv has. And that's quite expensive...
phkza wrote:On the other hand. Malèv has a strong brand in the region, so maybe a carrier like TK might step in, like they're planning to do with LOT...
And why would anyone do that? Malev is (and actually has been for while) bankrupt for a reason. If anything would be bought it would be the brand only, not the whole airline.
But, in all fairness, this is actually good news for the industry. In times of crisis the bad apples must go and Malev was a bad apple already in the good times. This will ensure financially healthy airlines have a better chance of survival, instead of the subsidized airlines.
330/340 wrote:The accident with the B-767 few months ago didn't help realy to came out of the financial problems.
What accident?
Erwin
I think he refers to that 737-800 that had a tail strike during take off (can't remember the details) that caused a expensive repair.
The 767 is gone for some time now, the 767-200 for years and the -300 (ex KLM) went to S7 several months ago
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27-02 I fly to Budapest with Malev ... Quickly jump to the travel agency
news. The airline industry starts to live up to that song by Queen: "... and another one gone, another one gone, another one bites the dust...". When national carriers like Malev (even when taking into consideration that MAH wasn't exactly profitable for ages and had to be sustained by government money) start falling, it looks like the end of troubles is nowhere in sight... by far! In the end, it was the government funding that did them in, as European rules (something the Hungarian government is at odds with more regularly of late) forced Malev to repay these, leaving little or no confidence in the ability to overcome it's cash-flow problems. A sad day; can't see much candidates for a take-over...
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