ATW Daily News

Government investment to key Malev turnaround

Wednesday November 11, 2009

Malev Hungarian Airlines expects a final decision about its future ownership by the end of this month. The troubled carrier is in talks with the government, which is considering reinvesting in Malev and helping it restructure, Deputy CEO and CCO Karim Makhlouf told ATWOnline at this week's oneworld event in Mexico City. He said the government likely will acquire at least 51%. The airline currently is 99.5% owned by the AirBridge consortium, which is backed by Russia's Vneshekonombank. It was privatized in 2006.

Meanwhile, management is doing everything possible to stabilize Malev, Makhlouf said. Its current fleet of 30 aircraft will be reduced to 20 for the winter season, with most of the remainder parked, and 30% of its 1,500 employees will be laid off. The fleet will rise back to 28 aircraft for the summer 2010 schedule. "Our plan is to increase the MA fleet by three steps, up to 40 aircraft, by 2012," he said. It plans to double its Q400 fleet to eight in the near future and remains committed to its letter of intent for 30 Sukhoi Superjet 100s. "We will focus on extending our network in Eastern Europe, with the first enhancements on these routes starting in January."

He said Malev made a mistake in not focusing on Eastern Europe in the past and has failed to derive maximum benefit from its oneworld partnerships. It is looking to strengthen ties with Iberia, Finnair and British Airways. "We also want to take advantage of the restructuring of Austrian Airlines and CSA Czech Airlines. We believe we can react faster [in certain markets]," he said. Utilization is another key, and he said capacity additions will come largely through more efficient use of aircraft. Malev has suffered from load factors as low as 63% in the past and also from a poor image, inefficiencies and carrying too many employees.

by Kurt Hofmann

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