Hungarian airline runs out of money, planes grounded

BUDAPEST - Agence France-Presse

Hungarian flag-carrier Malev’s aircrafts are seen parked on the tarmac at the Ferenc Liszt International Airport in Budapest. REUTERS photo

Hungaria’s national airline Malev said on Friday that it had grounded its planes after running out of cash almost a month after the European Union said the carrier must pay back state aid.

“At 5 a.m. GMT on Feb. 3, after 66 years of almost continuous operations, Malev stopped taking off,” chief executive Lorant Limburger told a news conference.

The immediate reason for grounding the flights was a refusal by Israeli ground staff to service a Malev flight in Tel Aviv, Limburger said.

“Since the government can no longer provide resources due to the EU’s decision and there is no feasible partner in sight, the company’s operations became impossible,” Malev chief Laszlo Berenyi added. “Every (partner) asked for payments in advance, and claims accelerated incredibly. No company can honor payments months in advance.”

Partners have become jittery since the European Commission on Jan. 9 ordered the Hungarian flagship carrier to repay various forms of state aid received between 2007 and 2010 that amounted to 38 billion forints ($171 million), a sum equal to its entire 2010 revenue.

This prevented the Hungarian state from providing liquidity to the stricken airline.

Following Friday’s announcement, Prime Minister Viktor Orban still told state radio MR1-Kossuth that Malev might be relaunched “if we manage to get rid of the inherited skeletons.”

The airline informed its passengers at Budapest’s Liszt Ferenc Airport that all its flights were being grounded. According to Hungarian newswire MTI, 64 Malev flights were scheduled to fly from Budapest on Friday.