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Hungarian national airline Malev collapses

Hungary's national carrier Malev has folded after running out of money, bringing 66 years of almost continuous flying to a halt.

Malev hungary 2012 02 03Enlarge
Malev's announcement that it was grounding its planes comes almost a month after the EU ordered it to pay back state aid received over three years worth $171 million – a sum equal to its entire revenue in 2010. (ATTILA KISBENEDEK/AFP/Getty Images)

Hungary national airline Malev has folded after running out of money, bringing 66 years of almost continuous service to an end.

The carrier’s announcement that it was ceasing operations and grounding its planes comes almost a month after the EU ordered it to pay back state aid worth $171 million received between 2007 and 2010 – a sum equal to Malev’s entire revenue in 2010.

“At 0500 GMT on February 3… Malev stopped taking off,” chief executive Lorant Limburger told a news conference, according to the AFP.

Hungarian Prime Minister Viktor Orban told Kossuth radio today that the decision to shut down Malev, which was put into bankruptcy protection on Monday, came after two of its planes were denied permission to take off from Israel and Ireland because of Malek’s debts.

A new national airline could still be established, he said, if investors were prepared to operate it profitably and risk their own cash.

An airline statement said that “despite its best interests, the owner can no longer provide financial resources of the airline in the wake of the condemning decision of the European Commission,” the BBC reported.

More from GlobalPost: Are Europe's airlines about to crash?

Malev employs 2,600 people and generates almost half of all air traffic at Budapest’s Liszt Ferenc airport.

In a December white paper, the government said potentially losing the airline, which spent about $65 million dollars a year on real estate fees and air service charges, could jeopardise the airport’s operation, Reuters reported.

Lead administrator Balazs Fabian told journalists that “the company will soon announce mass layoffs,” without specifying how many staff would be left without a job.

Malev’s folding comes just days after Spanair, Spain’s fourth-largest airline, suddenly collapsed, leaving more than 30,000 passengers stranded across Europe and Africa, GlobalPost reported.

The airline’s chairman said that the Catalan government-subsidized carrier had failed to attract investment and that the regional government had decided to stop providing funds. 

More from GlobalPost: Spanair's sudden collapse leaves over 30,000 passengers stranded

http://www.globalpost.com/dispatch/news/business-tech/120203/hungarian-national-airline-malev-collapses