Malév Hungarian Airlines

MALÉV Ltd. ( hu, Malév Zrt.), which did business as MALÉV Hungarian Airlines ( hu, Magyar Légiközlekedési Vállalat, abbreviated ''MALÉV'', ), was the flag carrier of Hungary from 1946 until 2012. Its head office was in Budapest, with its main hub at Budapest Ferenc Liszt International Airport. The airline flew to over 50 cities in 34 countries with a fleet of 22 aircraft. Malév joined the Oneworld alliance on 29 March 2007. On 3 February 2012, Malév ceased operations and on 14 February 2012 was declared insolvent by the Metropolitan Court of Budapest.

History

Beginnings

Hungarian civil aviation was pioneered by airlines such as ''Aero Rt.'' (founded 1910), ''Magyar Aeroforgalmi Rt.'' (Maefort) and ''Magyar Légiforgalmi Rt.'' ( MALÉRT (mɒleːrt)). The widespread devastation of World War II forced these airlines to suspend airline service in 1940–44, and they were ultimately replaced by Maszovlet as the national airline after the war. Maszovlet was founded on 29 March 1946, as the Hungarian-Soviet Civil Air Transport Joint Stock Company (''Magyar-Szovjet Polgári Légiforgalmi Rt.'' also known as ''MASZOVLET''), as a merger between ''Malert'', ''Maefort'' and the Hungarian part of ''Aeroflot''.

The initial fleet consisted of 21-seat Li-2 passenger aircraft (the Soviet-licensed DC-3) and 3-seat Po-2 "taxis", used for precision air mail: sacks of mail were dropped from the aircraft when flying over its destination. In 1950, Malév's operating base moved from Budaörs to the newly opened airport at Ferihegy, where it remained.

On 25 November 1954, Hungary acquired all the Soviet shares of MASZOVLET, and renamed the company MALÉV. Ilyushin Il-14 twin piston-engined transport aircraft were acquired in the late 1950s. Operations were expanded, with flights extending to nearby countries and, following the 1965 acquisition of Ilyushin Il-18 turbine propeller airliners, and the subsequent 1968 purchase of jet-powered Tupolev Tu-134s from the Soviet Union, across Europe and the Middle East. In the summer of 1974, the Tupolev-154 was brought into scheduled service.

Even before the political changes of 1989 and the arrival of democracy, Malév had begun phasing out its Soviet-era planes with the introduction of the airline's first Western-designed aircraft, a Boeing 737-200 on 18 November 1988. With that, Malév was the second airline in the then-communist COMECON countries of Central Europe to operate a Western-built aircraft. ( TAROM – Romanian Airlines started operating the BAC 1-11 in 1968 and the Boeing 707 in 1974. LOT – Polish Airlines was the third with its Boeing 767-300 aircraft launched in April 1989).

The company's logo, which turned out to be its last, was designed by graphic designer László Zsótér ( DLA) in 1986 and consecutively adopted during the following years.

1990s–2007: Modernisation

The last Soviet-built Tupolev Tu-154 aircraft was withdrawn from service in 2001. In 2003, MALÉV began replacing its Boeing 737 Classic aircraft with 737 Next-Generation planes. It then ran a fleet of 18 Boeing 737 Next Generations, as well as 4 Bombardier Dash 8 Q-400s for short-haul routes.

From 1999 to 2007, the Hungarian State Privatization Company ÁPV Plc. ( Állami Privatizációs és Vagyonkezelő Rt.) owned 99.5% of Malév shares. The other 0.5% were in the hands of small shareholders. József Váradi was CEO from 1999-2003. He later founded Wizz Air. ÁPV Plc. repeatedly tried to privatise Malév, finally selling it to AirBridge Zrt.

2007–2011: In private hands

AirBridge acquired 99.9% of the airline in February 2007. It had 1,785 staff members, as of 31 December 2007.

Despite Czech Airlines' offer to sponsor Malév as an associate member of the SkyTeam alliance, and MALÉV's codeshare agreements with several SkyTeam carriers, Malév joined Oneworld on 29 March 2007.

On 12 July 2007, Lloyd Paxton was appointed CEO of MALÉV. Paxton replaced János Gönci, who remained on the board of directors as an adviser. Paxton was the first MALÉV CEO to come from the airline industry. He had been with British Airways for over 35 years and more recently with Air Astana. Two months later, on 14 September 2007, Lloyd Paxton resigned as CEO of MALÉV, replaced by Péter Leonov. In January 2009, Ballo Anatoly Borisovich became the chairman.

On 18 March 2009, the Russian state-owned Vneshekonombank took a minority stake of 49% in AirBridge Zrt which held the shares of the struggling airline. The majority, 51%, remained in Hungarian ownership. The managing control would be taken by Russia's Aeroflot – Russian Airlines. Martin Gauss, former CEO of DBA and Cirrus Airlines as well as a Boeing 737 pilot was elected as CEO on 15 April 2009. During the management of Martin Gauss, MALÉV reached a load factor above industry average among "traditional" airlines, comparable of that of low-cost airlines. One of the reasons of the departure of Martin Gauss as CEO of MALÉV was the benefit ceiling established by the newly elected government, led by Orban Viktor, in 2010, where a ceiling of €8000 gross salary (approx €5000 net) was set for all managers, governing state-owned companies.

The airline was renationalised in February 2010, with Hungarian Government state holding company MNV acquiring a 95% stake in the airline. The remaining 5% remained with AirBridge. In December 2010, the European Commission began an investigation into illegal government subsidies of Malév.

2012: Financial collapse and cessation of operations

On 9 January 2012, the European Union considered the state aid received by MALÉV illegal and ordered Hungary to recover it from the company. The European Commission ordered MALÉV to repay various forms of state aid received from 2007 to 2010, totalling 38 billion forints (€130 m; $171 m), a sum equal to its entire 2010 revenue.Hungarian airline Malev collapses
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