Sunday, September 28, 2008

Malev in Trouble

Budapest Airport worried about Malev Airline downsizing

Wednesday, 24 September 2008
Budapest, September 24 (MTI) - Budapest Airport, the company that runs the city's Ferihegy International Airport, is worried about the downsizing of Hungarian Airlines Malev, as it generates the lion's share of traffic at the facility, wrote Wednesday's nationwide daily Nepszabadsag. Malev is owned by a company called AirBridge, which is part of a Russian consortium called Air Union. Financier Boris Abramovich, who has a 49 percent stake in AirBridge, has lost his majority hold in Air Union, which is being bailed out of a financial hole by a Russian government-owned corporation called Rostechnology. Rostechnology plans to expand the union, now including five airlines, by adding another five. No one is quite sure how Malev fits into the picture, but one-third of the company's 300 pilots received layoff notices on Monday, wrote Nepszabadsag. The pilots' union, Hunalpa, has charged management with dilettantism, claiming that multiple mistakes have been made, including termination of several long-haul flights. Hunalpa officials say that the company needs a well-capitalised investor, and tell of an unnamed Middle Eastern airline that is interested in Malev. Moscow analysts, however, say that Malev will not change hands. The contract with AirBridge prohibits a resale without the permission of the Hungarian government, but that is not the case for stocks in the company. Analyst Oleg Panteleyev of Aviaport acknowledged that a review of Abramovich activity was a theoretical possibility. Should the Abramovich brothers be found responsible for the Air Union's financial hole and required to pay compensation, AirBridge might become part of a compensatory package, said Panteleyev, adding, however, that he saw little practical chance of this, wrote Nepszabadsag.

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