Malev is ordered by the EC to repay illegal government loans

Malev Hungarian Airlines (Budapest) is facing a new financial crisis. Today the European Commission (EC) of the European Union (EU) ruled the 2007-2010 government loans were illegal and must be repaid. The Hungarian government is now scrambling to save the national carrier and will discuss the issue on January 16.

The airline has issued the following statement:

“The EU decision, which qualifies Hungarian state aid given to the airline between 2007-2010 as contrary to EU regulations, does not mean that Malév faces an immediate payment liability. The EU ruling does not affect the daily functioning of Malév, its flights continue to operate according to schedule, the company continues to pay its suppliers in compliance with contractual conditions and it provides normal services to its partners. The resources necessary for this have been supplied by the company’s owner.

Malév continues to carry its customers on scheduled flights as normal. The Hungarian government has informed Malév management and the general public that it remains committed to maintaining the national carrier. Accordingly, Malév management and all staff members are carrying out their work as usual, and they are working on sustaining into 2012 the improvements in results recorded in the past few months.

Malév has forecast significantly improved operational results in 2012, justification for which is based on the financial results posted in the last quarter of 2011. The airline is showing outstanding performance indicators even when compared with its competitors: it achieved a load factor of 78% in the final month of last year, and in Q4 2011 it boosted revenue by HUF 7 billion compared with the same period of 2010.

Dr. János Berényi
Chairman of the Malév Board of Directors”

Copyright Photo: Andi Hiltl. Please click on the photo for additional information.