* Airline says financing unresolved beyond end of January
* Renews plea for govt help, but says aware options limited
* Govt declares airline strategically important
* Move allows govt to protect Malev from bankruptcy process
(Releads after Malev statement)
By Gergely Szakacs
BUDAPEST, Jan 30 Hungarian airline Malev
said it doesn't have the financing to
keep going , hours after the government took
preparatory steps to restructure the loss-making carrier and
protect it from bankruptcy proceedings.
The announcement follows a European Commission ruling early
this month that forced the carrier to repay state aid worth
hundreds of millions of dollars received from 2007-10, the
equivalent of its entire 2010 revenue.
"At today's board meeting, chief executive Lorant Limburger
informed the board that, despite the continuous improvement in
commercial results, the financing of operations has become
unsustainable as of the end of January, and it is unresolved,"
Malev said on Monday.
The airline, which accounts for 40 percent of annual turnover
at Budapest's international airport, said it had managed to
agree with U.S. firm ILFC on the continued lease of its fleet,
which comprises 22 passenger aircraft.
Malev's management must draw up a liquidity management plan
by the end of this week, the airline said, renewing a plea for
government help to resolve the situation.
After failed privatisation attempts, Hungary in 2010 bought
back all but a 5 percent stake in the carrier, which employs
"The board ... asked the owner to do all it can to resolve
the situation, while conceding that the (January EU Commission)
ruling makes the government's room for manoeuvre very limited,"
Malev said in a statement.
Earlier on Monday a government decree, signed by Prime
Minister Viktor Orban, designated Malev as a strategically
important company, preventing creditors from launching
The decree also allows a government body to run any
liquidation procedure started against Malev and handle its
In a Jan. 9 ruling, the EU Commission listed various forms
of state financing for Malev between 2007 and 2010, which it
said Malev would not have been able to obtain from the market on
the terms granted by the Hungarian authorities.
The airline posted a loss of 24.6 billion Hungarian forints
($110 million) in 2010, but early this month forecast a
significant improvement in operating results this year on the
back of higher revenue and by filling more seats on its planes.
($1 = 224.2766 Hungarian forints)
(Reporting by Gergely Szakacs)