Hungary’s airline Malev grounded (The Guardian-UK)

February 4, 2012

Bankrupt Hungarian flag-carrier Malev grounds fleet after two aeroplanes seized, as Ryanair and other budget carriers announce new routes to Budapest

Hungary‘s dire financial predicament was laid bare today when its national airline Malev went bust and grounded all flights after failing to find a solution to “unsustainable” liabilities estimated at €550m (£460m).

Sources say Malev collapsed after nervous suppliers began asking for advance payments, which the airline was unable to provide. Two of its aircraft were prevented from taking off from Dublin and Tel  Aviv, prompting the decision to ground all Malev aircraft worldwide from 5am.

Company officials said the stoppage immediately affected some 7,200 passengers: 3,500 in Hungary and more than 3,700 abroad who had been expecting to board Malev flights on Friday. Malev said it had contacted other airlines in search of help for the stranded travellers.

The Irish low-cost airline Ryanair announced 26 new routes from Budapest in a move to capitalise on the grounding of Malev. Ryanair, which announced plans last month to fly five routes from Budapest, increased that to 31, most of which will be operating by April, the company said. It said it will base four aircraft at Budapest and carry up to 2 million passengers a year.

Complete article in The Guardian-UK