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PEET7G
Posts: 471
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RE: Malev Ceases Operation Part 2

Mon Feb 06, 2012 10:42 pm

Quoting bennett123 (Reply 44):
I did not know that there was a B737 stuck in IST, but I thought HA-LOA was in TLV.

You are correct, HA-LOA is still in TLV while HA-LOI is stuck in DUB.
HA-LOP returned yesterday evening to SNN, and there is HA-LOB still in the Aeroplex hangar at BUD awaiting the finish of some maintenance work, and will fly out to join the others at SNN when the works are finished.

Quoting Revelation (Reply 47):
Isn't it wrong to justify one bad act by pointing to another bad act?

I think you are correct, but I can not set emotions aside, please excuse me for that.

However there is a huge difference here, to many of the previous fallen carriers.

1, MA had a viable development track, and it seemed achievable
2, BUD is left without a "home carrier" (and I know many will bring up W6 again, and even FR, but those are no replacement for "business" travelers, as well as no option for connecting traffic in the region
and of course there are many things more here...

Quoting raffik (Reply 29):
Ryanair are going to do very well in Budapest.. they must have been planning a base there for a while to come up with such a comprehensive schedule so quickly? Were they waiting for the demise of Malev?

Not really, BUD airport has today made a statement that they don't know why FR is advertising these routes, as they still have not come into agreement with them apart from the already announced 5 routes, and that they are not willing to make compromises and let them selves get raped by FR just because MA is gone...so there are only negotiations going on between FR and BUD airport. (I am proud for BUD management for taking a stand against this scavenger, if they want to fly from here then pay the fees...period)

Quoting magyar (Reply 9):
Here is a question which may be stupid. Why only LCC can set up a base in BUD? Why not a large legacy carrier?
What if BA would base a few A320/319 in BUD and take over the Malev network, or whatever part of it that was useful for the OneWorld alliance?

There were many arguments for not having a national carrier for every single EU countries.I agree, but then why not allow big legacy carriers establish hubs/focus cities wherever they want in the EU?

I don't find that idea stupid at all, and I can see something on the lines like Lufthansa Italia was at MXP.

I can accept the consolidation of the market, but BUD is too important not to have direct services it had just last week even.
Peet7G
 
JU068
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RE: Malev Ceases Operation Part 2

Mon Feb 06, 2012 10:56 pm

Quoting PEET7G (Reply 49):

Thank you very much for the reply. I guess that no newspaper in Hungary saw this coming hence why they were sending out so much negative publicity about Malev.

This news came as a shock for many in Serbia since 90% of travellers during the 1990s used to fly out of Budapest. Malév has a special place in our hearts making it difficult to realize they are gone.

Quoting PEET7G (Reply 50):
Not really, BUD airport has today made a statement that they don't know why FR is advertising these routes, as they still have not come into agreement with them apart from the already announced 5 routes, and that they are not willing to make compromises and let them selves get raped by FR just because MA is gone...so there are only negotiations going on between FR and BUD airport. (I am proud for BUD management for taking a stand against this scavenger, if they want to fly from here then pay the fees...period)

Could it be that there are signs from the Hungarian government that Malév will be reborn, hence why they are not ready to give everything Ryanair is asking for?

Quoting PEET7G (Reply 50):
2, BUD is left without a "home carrier" (and I know many will bring up W6 again, and even FR, but those are no replacement for "business" travelers, as well as no option for connecting traffic in the region
and of course there are many things more here...

Not to mention that they are operating out of a completely different terminal. One could even argue that Ferihegy 1 and 2 are two different airports sharing a common runway.

Quoting PEET7G (Reply 49):
- MA got 74% of its income out of tickets sold to foreigners (74% is the revenue and not the passenger numbers! this means MA managed to sell higher priced fare abroad!)

I am sure a large part of that came from Cyprus. Last summer they used to operate 9 weekly flights on board their B737-800!
 
Akiestar
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RE: Malev Ceases Operation Part 2

Mon Feb 06, 2012 11:04 pm

I raised this in the previous thread, but it could feed the curious mind very well: what motive did the W6 CEO, who was a former MA CEO, have to complain to the European Commission about the so-called "illegal" state aid MA was receiving?
 
PEET7G
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RE: Malev Ceases Operation Part 2

Mon Feb 06, 2012 11:20 pm

Quoting akiestar (Reply 52):
I raised this in the previous thread, but it could feed the curious mind very well: what motive did the W6 CEO, who was a former MA CEO, have to complain to the European Commission about the so-called "illegal" state aid MA was receiving?

Well he and his team where kicked out from MA management, he then pledged revenge...it is a Hungarian mentality unfortunately. We have a saying here, that the biggest harm to a Hungarian can only be caused by a Hungarian  

As well as Mr Viktor Orban, the now PM, he was left behind by an MA flight to YYZ (they served Toronto with their 767s then) during his last session (1998-2002) he then pledged that MA employees will hang by their ankle along the fence of BUD once (thats how I heard on the corridors of MA offices)...he complied with that  
Quoting ju068 (Reply 51):
Could it be that there are signs from the Hungarian government that Malév will be reborn, hence why they are not ready to give everything Ryanair is asking for?

Unfortunately only the opposite is beginning to form, they are more and more saying that the market will fill the void left by MA. They have no plans, 0, null... only if a real professional investor will volunteer to give it a try again can I see any hope now  
Quoting ju068 (Reply 51):
Not to mention that they are operating out of a completely different terminal. One could even argue that Ferihegy 1 and 2 are two different airports sharing a common runway.

It is rumored that Terminal 1 will close and all operations will be moved to Terminal 2.

Quoting ju068 (Reply 51):
I am sure a large part of that came from Cyprus. Last summer they used to operate 9 weekly flights on board their B737-800!

Yes Cyprus was huge moneymaker for them, as well as Greece, no wonder A3 is making a move on the ATH-BUD market, however MA had a huge amount of connecting passengers from Greece to their network.


...just an interesting news, the Hungarian Consumer Protection might start inspections against FR because they are falsely advertising routes they yet have 0 agreements on, thus all statements made by them, and even selling tickets is seriously unlawful.
Peet7G
 
JU068
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RE: Malev Ceases Operation Part 2

Tue Feb 07, 2012 6:56 am

Quoting akiestar (Reply 52):

Well he probably knew that it would bring Mal

Quoting PEET7G (Reply 53):
Unfortunately only the opposite is beginning to form, they are more and more saying that the market will fill the void left by MA. They have no plans, 0, null... only if a real professional investor will volunteer to give it a try again can I see any hope now

Ah what a shame, I doubt anyone would be interested now... I guess this will have a negative impact on the current coalition during the next elections. They should have thought of that when they agreed to let Malev go bankrupt.
Look at what happened after the demise of Balkan in Bulgaria. They formed a much smaller airline which was the successor of the airline which mostly serves the O&D market out of Sofia.

Quoting PEET7G (Reply 53):
It is rumored that Terminal 1 will close and all operations will be moved to Terminal 2.

Hmm does that mean that lowcost airlines will have to pay higher fees to fly into Budapest?

Quoting PEET7G (Reply 53):
Yes Cyprus was huge moneymaker for them, as well as Greece, no wonder A3 is making a move on the ATH-BUD market, however MA had a huge amount of connecting passengers from Greece to their network.

I was told by the people who worked for Malév in Cyprus that the Larnaca was one of the most profitable routes for the airline. It was so profitable that they even kept their office open until the last day!
 
kl911
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RE: Malev Ceases Operation Part 2

Tue Feb 07, 2012 8:43 am

Quoting PEET7G (Reply 49):
The biggest problem is (according to another article, and I totally agree) that the government has made no plans (and even now they are sitting still and waiting for miracle to happen) to start up a new MALEV out of scratch.

That does not make sense. Why would any government want to run an airline nowadays and bleed tax money on it?? let smart private investors decide if there is a businesscase for an airlinehub or not. My opinion is still that Budapest does not need a legacy carrier. The market is clearly to small and too low yielding.

The business travelers trhat are there can easily fly KLM, Lufthansa, BA etc etc.
 
art
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RE: Malev Ceases Operation Part 2

Tue Feb 07, 2012 9:02 am

"Hungarian-based Wizz Air (W6) announced it will invest HUF25 billion ($100 million) into expanding its Budapest operations after state-owned Malev Hungarian Airlines ceased operations Friday (ATW Daily News, Feb. 6).

W6 said it will add two Airbus A320s at the base in March, representing a 66% increase in capacity. It expects yearly passengers carried to reach 2 million—up 42.9% over its previous estimate of 1.4 million."

http://atwonline.com/airports-routes...on-expand-budapest-operations-0206
 
kl911
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RE: Malev Ceases Operation Part 2

Tue Feb 07, 2012 10:16 am

Quoting ju068 (Reply 54):
Quoting PEET7G (Reply 53):
It is rumored that Terminal 1 will close and all operations will be moved to Terminal 2.

Hmm does that mean that lowcost airlines will have to pay higher fees to fly into Budapest?

Noooo, please stay at Terminal 1. Its a much better terminal with easy ground transportation by train to the citycenter. Terminal 2 is a long ride by bus or taxi over a small very bumpy road.
 
L410Turbolet
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RE: Malev Ceases Operation Part 2

Tue Feb 07, 2012 10:24 am

Quoting ju068 (Reply 54):
Hmm does that mean that lowcost airlines will have to pay higher fees to fly into Budapest?

Does it really make such difference as to what terminal they use rather than what airport services they order?
 
JU068
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RE: Malev Ceases Operation Part 2

Tue Feb 07, 2012 10:55 am

Quoting L410Turbolet (Reply 58):
Does it really make such difference as to what terminal they use rather than what airport services they order?

Well I do not know how it works in Budapest but in Belgrade the usage of Terminal 1 (older) in stead of Terminal 2 is cheaper no matter what services you use.
 
lauda777
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RE: Malev Ceases Operation Part 2

Tue Feb 07, 2012 11:12 am

Like I said I had flights booked with Malév for my holiday in August but after reading some of the posts here I will not be flying with any of these LCC's as they are nothing but a bunch of parasites and will not get my money.
Looks like I will have no choice but to rebook with KLM for my BUD-AMS flight albeit for more money, but still better than paying $500AUD and having to land in Eindhoven what a joke.
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chrisrad
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RE: Malev Ceases Operation Part 2

Tue Feb 07, 2012 11:26 am

Quoting lauda777 (Reply 60):
Like I said I had flights booked with Malév for my holiday in August but after reading some of the posts here I will not be flying with any of these LCC's as they are nothing but a bunch of parasites and will not get my money.
Looks like I will have no choice but to rebook with KLM for my BUD-AMS flight albeit for more money, but still better than paying $500AUD and having to land in Eindhoven what a joke.

I have similarly had to re-book my FRA-BUD-FRA flights. Air Berlin ended up being the cheapest and most convenient going there, and LH going back.

I've seen KLM prices for BUD-AMS for around $176 AUD return.
Welcome aboard Malaysia Airlines! Winner of Best Cabin Staff 2001,2002,2003,2004,2007,2009,2012
 
lauda777
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RE: Malev Ceases Operation Part 2

Tue Feb 07, 2012 11:36 am

Yeah well there's 3 of us going so KLM is gonna cost me around $670 where as I had the tickets booked on Malév for $500   Wizz Air wanna charge me $500 to Eindhoven after I add baggage etc it's just not worth it, undecided what I'm doing but a LCC would want to be actually cheap for me to consider them.
We remind passengers all flights are non smoking, if you are caught smoking you will be asked to sit outside on the wing
 
kl911
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RE: Malev Ceases Operation Part 2

Tue Feb 07, 2012 12:12 pm

Quoting lauda777 (Reply 62):
Wizz Air wanna charge me $500 to Eindhoven after I add baggage etc it's just not worth it, undecided what I'm doing but a LCC would want to be actually cheap for me to consider them.

Ryanair has 9,99 euro one way fares now Eindhoven - Budapest. Also Smartwings will start Amsterdam - Budapest soon, they are Czech, I flew them Amsterdam - Prague. Nothing to complain about, both times landed early.
 
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Revelation
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RE: Malev Ceases Operation Part 2

Tue Feb 07, 2012 1:09 pm

It's interesting to compare:

Quoting kl911 (Reply 55):
That does not make sense. Why would any government want to run an airline nowadays and bleed tax money on it?? let smart private investors decide if there is a businesscase for an airlinehub or not. My opinion is still that Budapest does not need a legacy carrier. The market is clearly to small and too low yielding.

to:

Quoting lauda777 (Reply 62):
Yeah well there's 3 of us going so KLM is gonna cost me around $670 where as I had the tickets booked on Malév for $500

Not hard for me at least to reach the conclusion that MA wasn't charging what it takes to run a full-service airline.
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JU068
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RE: Malev Ceases Operation Part 2

Tue Feb 07, 2012 1:12 pm

Quoting Revelation (Reply 64):

Not hard for me at least to reach the conclusion that MA wasn't charging what it takes to run a full-service airline.

Based on what? One guy's booking to one of 50 destinations flown by Malev?
 
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Revelation
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RE: Malev Ceases Operation Part 2

Tue Feb 07, 2012 1:23 pm

Quoting ju068 (Reply 65):
Based on what? One guy's booking to one of 50 destinations flown by Malev?

Well, that, and the bankruptcy...
Wake up to find out that you are the eyes of the world
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Wake now, discover that you are the song that the morning brings
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JU068
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RE: Malev Ceases Operation Part 2

Tue Feb 07, 2012 1:27 pm

Quoting Revelation (Reply 66):
Well, that, and the bankruptcy...

If you read carefully what was written before Malev was making money and the only reason why it went into bankruptcy is because it had to pay back the €350 million.
 
Tupolev160
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RE: Malev Ceases Operation Part 2

Tue Feb 07, 2012 1:54 pm

Another airline victim of EU's double standards...

In the 1990's BUD profited from the wars and sanctions in ex-YU and took away from BEG the role of region's hub. Only blind people at JU can't see the chance of opening a BUD-BEG service and making the same thing happen the other way around, while making passenger transiting through BEG, as it already does from smaller airports in the region.

PS: Why was the entire MA's fleet leased from ILFC?

PS2: Is it true that the Hungarian government will have to pay 1.5 billion to the operator of BUD for MA's bankrupcy?
"In a time of universal deceit, telling the truth becomes a revolutionary act."
 
kl911
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RE: Malev Ceases Operation Part 2

Tue Feb 07, 2012 2:17 pm

Quoting ju068 (Reply 67):
If you read carefully what was written before Malev was making money and the only reason why it went into bankruptcy is because it had to pay back the €350 million.

So it wasnt making money then if the €350 million was illegal aid that other carriers didnt receive.
 
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Revelation
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RE: Malev Ceases Operation Part 2

Tue Feb 07, 2012 2:46 pm

Quoting ju068 (Reply 67):
If you read carefully what was written before Malev was making money and the only reason why it went into bankruptcy is because it had to pay back the €350 million.

If that were so, then I have to agree with PEET7G:

Quoting PEET7G (Reply 49):
...as I already said before, even the worst case scenario should have been bankruptcy protection for MALEV, re-organizing a "new" MALEV, bankrupt the old MALEV, and immediately restart operations (maybe within days and not months!) with a new MALEV. Unfortunately they managed to figure out an even worse case scenario

One would think if there was the core of a profitable business there, someone would be waiting to take over the profitable part after a quick dive through bankruptcy.
Wake up to find out that you are the eyes of the world
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PEET7G
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RE: Malev Ceases Operation Part 2

Tue Feb 07, 2012 2:51 pm

Quoting kl911 (Reply 69):
So it wasnt making money then if the €350 million was illegal aid that other carriers didnt receive.

Not really fair, what you guys are playing here...

Quoting Revelation (Reply 64):
Not hard for me at least to reach the conclusion that MA wasn't charging what it takes to run a full-service airline.
Quoting ju068 (Reply 65):
Based on what?
Quoting Revelation (Reply 66):
Well, that, and the bankruptcy...

Revelation was suggesting, that MA under-priced their service...
Ju068 asked what is the basis of his suggestion
Revelation in part based that on the fact that they went under
ju068 (rightfully) pointed towards the fact that MA managed to close the year end with operational profit, and that it was brought down by (in part) the EU ruling to pay back the "illegal" aid given to them between 2007-2010 (which was a whole different and very sad era in the life of the company) and had nothing to do with their restructured operations in 2011 ( let me also note that MA was also in trouble due to certain loans and other "bank traps", but probably those could have been overcome... it was the EU ruling that made their future a nightmare, and most importantly that they even should have had to pay interest-rates on that "illegal" aid too.

Anyway, back to what Revelation said and ju068 claimed:

MA alone if it could have gotten rid of that debt burden, just taking operations into account, would have been a very smart CEE carrier.

Here are some plans that where either already nearly finalized or on top of the "to-do" list:
They already managed the renegotiation of lease rates and draw up a plan to change the fleet to newer (like wingletted -800s and -700). I know there was a done deal on the time-frame to return the uneconomical -600s, and I know they where (well at least 3 I saw the papers of) where already destined for the scrappers. (on the contrary to some beliefs here, the SSJ was not on the table at all anymore), 4 new Q400s would have also entered the fleet (however I have not seen any definite date for that)

...so please everyone, instead of trying to prove what a shity airline MA was see behind the front-lines. I think the bankruptcy of the "old" MA was unavoidable with its rolling debt burden, and especially forthcoming after the EU decision... what is really shocking here for everyone is that the management, the crew, and the whole little MA team has proved that they can be viable and they are so important factor in the Hungarian economy, and everyone (including myself) expected that they will keep the "old" MA alive until new plans are being drawn up, and then they pull a re-birth trick ala OA, AZ, LX...or something along those lines. This is the huge opportunity they missed, and with every day going by the damage is greater and greater, and any chance of a re-birth is less and less unlikely.
Peet7G
 
PEET7G
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RE: Malev Ceases Operation Part 2

Tue Feb 07, 2012 3:04 pm

Quoting Revelation (Reply 70):
One would think if there was the core of a profitable business there, someone would be waiting to take over the profitable part after a quick dive through bankruptcy.

There where many coming and going and interested in buying MA. The Hainan Group was the most serious taker. I know of IAG looking very close at them, an the list goes on to a banker group, Unimex Group (I think they own Travel Service Airlines and Smartwings) but in each and every case they where scared away by the huge debt burden coming with Malev... as well as in some cases where vetoed by the 5% owner the VEB Russian Bank who due to some reasons retained a veto power within MA management after the government acquired back the 95% ownership in 2010. They vetoed some decisions because they feared that they will not get their money back  
Peet7G
 
JL418
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RE: Malev Ceases Operation Part 2

Tue Feb 07, 2012 5:42 pm

Quoting PEET7G (Reply 49):
The biggest problem is (according to another article, and I totally agree) that the government has made no plans (and even now they are sitting still and waiting for miracle to happen) to start up a new MALEV out of scratch. While their biggest enemy is time, because the market reacts quickly, and by the time they might be ready for a relaunch, their market-share will be gone in a flash  

...as I already said before, even the worst case scenario should have been bankruptcy protection for MALEV, re-organizing a "new" MALEV, bankrupt the old MALEV, and immediately restart operations (maybe within days and not months!) with a new MALEV. Unfortunately they managed to figure out an even worse case scenario

Thanks PEET7G. The government's idleness is incredible, I'd expected Orban to act way quickier or, however, to do something at all. Instead, according to your post, they're basically sitting and contemplating the facts, aren't they?

It angers me to see how Malév has been ruined by years of political mismanagement and now politics is kissing it goodbye.
 
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Revelation
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RE: Malev Ceases Operation Part 2

Tue Feb 07, 2012 7:24 pm

Quoting PEET7G (Reply 72):
but in each and every case they where scared away by the huge debt burden coming with Malev...

Yes, that's why the quick trip through bankruptcy you described above would be needed.

Quoting PEET7G (Reply 72):
as well as in some cases where vetoed by the 5% owner the VEB Russian Bank who due to some reasons retained a veto power within MA management after the government acquired back the 95% ownership in 2010.

Under US laws, the existing shareholders get wiped out. If VEB was also a creditor, they would have votes on the creditor's committee during bankruptcy, but not veto power, and the judge has ultimate authority. The judge could decide that a minority shareholder having veto power is not in the interests of the re-born company.

Is it different in Hungary?
Wake up to find out that you are the eyes of the world
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Wake now, discover that you are the song that the morning brings
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Thenoflyzone
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RE: Malev Ceases Operation Part 2

Tue Feb 07, 2012 8:54 pm

Now that HU is left with no codeshare partner in BUD, what will happen to its flight PEK-BUD?

Will it share the same faith as AA's JFK-BUD, which i hear will not return.

Thenoflyzone
us Air Traffic Controllers have a good record, we haven't left one up there yet !!
 
rj777
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RE: Malev Ceases Operation Part 2

Wed Feb 08, 2012 12:34 am

Sadly, this photo right here:

http://www.flickr.com/photos/[email protected]/6818062579/in/photostream/

reminds me of this:

 
krisyyz
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RE: Malev Ceases Operation Part 2

Wed Feb 08, 2012 12:59 am

Quoting PEET7G (Reply 42):
There is so much to say, and so much to argue with some of you, especially those with the air of patronage claiming why and how this is right and this is the way it had to happen and becoming an LCC heaven is the best future BUD could get...

Agreed, although BUD becoming a LCC hub is looking more likely, this sort of move towards basic service will hurt Hungary's business community. I for one will never fly Wizz or FR to BUD.

Quoting PEET7G (Reply 71):
Here are some plans that where either already nearly finalized or on top of the "to-do" list:
They already managed the renegotiation of lease rates and draw up a plan to change the fleet to newer (like wingletted -800s and -700). I know there was a done deal on the time-frame to return the uneconomical -600s, and I know they where (well at least 3 I saw the papers of) where already destined for the scrappers. (on the contrary to some beliefs here, the SSJ was not on the table at all anymore), 4 new Q400s would have also entered the fleet (however I have not seen any definite date for that)

So sad to hear that MA had a plan to streamline the fleet and move towards the future. Not going through with the SSJ would have been very positive too as it was a political order for sure. I guess Sukhoi's SSJ base in BUD is off now too.

The more I read about MA's collapse, the more I'm starting to think the Hungarian Govt and Orban wanted the national carrier to go down in flames due to political reasons with a touch of retribution for good measure.
PEET7G, I appreciate all the info and insight you have provided in this thread.

Quoting thenoflyzone (Reply 75):
Now that HU is left with no codeshare partner in BUD, what will happen to its flight PEK-BUD?

Will it share the same faith as AA's JFK-BUD, which i hear will not return.

Thenoflyzone

Possibly, although I think most of the pax on the HU flights to BUD were Chinese vacationers, much like JL's summer charters to BUD.

Quoting rj777 (Reply 76):
Sadly, this photo right here:

http://www.flickr.com/photos/[email protected]/6818062579/in/photostream/

reminds me of this:

Sad, sad, sad.... there is a post by a MA pilot who was involved in the "black procession" of MA's birds to SNN on airportal.hu but it is only in Hungarian.

KrisYYZ
 
Akiestar
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RE: Malev Ceases Operation Part 2

Wed Feb 08, 2012 12:41 pm

Saw it on FlyerTalk and I confirmed it through the website: Duna Club has been terminated!   
 
krisyyz
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RE: Malev Ceases Operation Part 2

Sun Feb 12, 2012 12:53 am

There was a relatively large rally held in Budapest in support of creating a "new Malev". The CEO of MA said that the company is still looking for investors to help restart the national carrier. However court hearings into to liquidation of MA and it's assets are due to begin this week.

One of the pilots featured in this news clip says in Hungarian "I started on the Il-18, flew the TU-134, TU-154 and the Boeings, and now its all come to an end".

FR is continuing its push to take over as many MA routes as possible. The Hungarian government is appreantly helping FR both by pressuring BUD and by giving financial help in order to start up ops in Budapest, quite ironic in my opinion.

http://www.hirado.hu/Hirek/2012/02/1...k__fotokon_a_Malevert_tartott.aspx

KrisYYZ
 
IndianicWorld
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RE: Malev Ceases Operation Part 2

Sun Feb 12, 2012 5:01 am

Quoting krisyyz (Reply 77):
Agreed, although BUD becoming a LCC hub is looking more likely, this sort of move towards basic service will hurt Hungary's business community. I for one will never fly Wizz or FR to BUD.

Very true. As for base opportunities, the LCC's will take that role, ut the Legacy carriers will find their position feeding their main hubs.

I agree that LCC's do nothing for me in my travels and I avoid them (same as JQ and TT here in Australia).

Quoting krisyyz (Reply 79):
There was a relatively large rally held in Budapest in support of creating a "new Malev". The CEO of MA said that the company is still looking for investors to help restart the national carrier. However court hearings into to liquidation of MA and it's assets are due to begin this week.

This all sounds like the AN situation in Australia back in 2001-02.

At times like these theres planned rallies and sadness/anger, but it ends in lots of talk and a protracted wind up. With the EU state aid and copetition rules, it ust akes things harder to get things off the ground again.

As has been said before, other carriers move into the market and fill the void quickly, squeezing out the opportunity for the airline to re-start. Its hard work to get things back into motion, which is costly and a risky proposition for an investor to undertake (which is the the TESNA bid failed to take off in its bid to get AN to restart ops as it needed lots of different pieces to come together to work).
 
LJ
Posts: 5380
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RE: Malev Ceases Operation Part 2

Sun Feb 12, 2012 9:17 am

Quoting PEET7G (Reply 71):
it was the EU ruling that made their future a nightmare, and most importantly that they even should have had to pay interest-rates on that "illegal" aid too.

The fact that MA was supported illegally in the 2007-2010 era which ended the life of MA. MA would have been long gone if the illegal aid in the years before wasn't given (I recall that even AF/KL looked at investing in MA). If MA is/was really a good investment, than the EUR350mio wouldn't be an issue (it's not that it was a surprise verdict). However, it seems though profitable in 2011, there still wasn't anyone ready to commit to investing in MA. Otherwise we would have had a Sabena/Swissair situation.

Quoting Revelation (Reply 70):

One would think if there was the core of a profitable business there, someone would be waiting to take over the profitable part after a quick dive through bankruptcy

Which explains why nobody actually thinks MA is viable. When both SN and LX went bust, the initial plans came out within a week. If haven't heard anything regarding such a start up this time. Moreover vultures were circling these airlines for the profitable parts of these companies.

Quoting PEET7G (Reply 71):

MA alone if it could have gotten rid of that debt burden, just taking operations into account, would have been a very smart CEE carrier.

As Sabena and Swissair have shown, there are ways to go around this (go bankrupt and start all over again, preferably within a week). However, as you correctly pointed out, there was no back-up plan though the EU ruling was to be expected.

Quoting kl911 (Reply 63):
Also Smartwings will start Amsterdam - Budapest soon

April 28th to be precise

Quoting kl911 (Reply 63):
Nothing to complain about, both times landed early

Hmmm I've been hearing different things about Smartwings
 
PEET7G
Posts: 471
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RE: Malev Ceases Operation Part 2

Sun Feb 12, 2012 9:32 am

Quoting Revelation (Reply 74):
Is it different in Hungary?

Not really, if the outcome is the total parting out of the assets of the company. Actually one of the scenarios in my head was that they filed for bankruptcy to get rid of the VEB Bank. Unfortunately as time passes by and we see how puzzled our government is, only realizing the impact MA's halt has on the economy...I can see that this was not an organized attempt to save the company  
Quoting krisyyz (Reply 79):
There was a relatively large rally held in Budapest in support of creating a "new Malev". The CEO of MA said that the company is still looking for investors to help restart the national carrier. However court hearings into to liquidation of MA and it's assets are due to begin this week.

I was there, well it was more like a farewell rally, a tribute to the company and its employees, with lots of moving speeches and even more tears. I was very touched about how many people showed up with candles and torches. They talk of many hundreds, in reality it was in the thousands of people. Police had to close down the whole roads and bridges as the crowd moved. The flying display by the Malev Aero Club was a very touching finish to the rally.

Quoting krisyyz (Reply 79):
FR is continuing its push to take over as many MA routes as possible. The Hungarian government is appreantly helping FR both by pressuring BUD and by giving financial help in order to start up ops in Budapest, quite ironic in my opinion.

I really have no idea what O'leary is up to, why is it good for him to piss of a nation who's airport he wants to move in and collect the anger of the people who's business he is seeking for... There is an overall anger against FR now here, with huge amounts of people swearing never to board an FR plane ever. The reason is his arrogance, spitting and lying in the media. Here is what happened so far:

Within hours after grounding Malev he was in Budapest talking about opening up 31 routes and taking over MA employees, and on the same day hew started selling tickets on those routes.
In reality:
MA pilots said the jobs they where offered are more like offensive than real jobs.
He had no rights to sell any tickets on those routes, because he did not manage to make a deal on slots, landing fees, in fact nothing...he just paraded around a little and lied about them striking a deal with the airport and the authorities.

It took FR a week to finally make some deal with the airport and the authorities, then he stated that it will be more routes and more planes in the deal, and pledged a price war against W6. He then said that FR flights will even fly out of T2 and that FR has received a superb deal from the airport as well as funds and subsidies from the Hungarian Government for starting up those routes. Of course there was an immediate anger here, and very quickly the airport came out and stated, that BUD's deal with FR is according to the total list price and that it is a lie that FR will start out of T2. If they want to fly out of T2, then they pay the fees of T2...period.
A few hours later several statements came out from the authorities that Leary lied too about them, because they are not giving a single cent to support FR.

This guy is a master of circus making. However it really looks like he overstepped a certain line with many here.


...and something pretty heartbreaking: MA employees sent out the last ever advertisement of the company. It was in newspapers on Friday and it was payed for by the employees them selves:

The text is something like this:

"We would like to thank every Malev passenger, who in the past 66 years chose us, the national carrier for their travels.

With lots of Love,

The Employees of MALÉV"

You can find a picture of the advertisement HERE

Very touching gesture, I think.   
Peet7G
 
JU068
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RE: Malev Ceases Operation Part 2

Sun Feb 12, 2012 10:36 am

I still think the Hungarian government gave up too fast. Let's not forget that subsidies are possible for some routes under special circumstances.
European Union allows subsidies for sectors such as tourism or expanding into new markets. This means that the €350 million was the total Malev had received over the past couple of years.
However a lot of the cash was used to open up and promote routes which were unserved from Budapest until Malev launched them. Best example is their route Budapest-Belgrade, they launched it in December 2009 with 7 weekly flights. As a promotional campaign they had a special offer €1 flights anywhere in Europe via Budapest. Such a service was eligible to receive state funding. This means that from Belgrade alone they could have had several millions off in the 4-5 months of promotional operations. Though the route was originally planned to be operated by a Dash-8 during that period it was mostly operated by B737-800!
Belgrade is just one out of 27 routes where Malev had a monopoly.
 
krisyyz
Posts: 1303
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RE: Malev Ceases Operation Part 2

Sun Feb 12, 2012 4:08 pm

Quoting PEET7G (Reply 82):
Within hours after grounding Malev he was in Budapest talking about opening up 31 routes and taking over MA employees, and on the same day hew started selling tickets on those routes.
In reality:
MA pilots said the jobs they where offered are more like offensive than real jobs.
He had no rights to sell any tickets on those routes, because he did not manage to make a deal on slots, landing fees, in fact nothing...he just paraded around a little and lied about them striking a deal with the airport and the authorities.

It took FR a week to finally make some deal with the airport and the authorities, then he stated that it will be more routes and more planes in the deal, and pledged a price war against W6. He then said that FR flights will even fly out of T2 and that FR has received a superb deal from the airport as well as funds and subsidies from the Hungarian Government for starting up those routes. Of course there was an immediate anger here, and very quickly the airport came out and stated, that BUD's deal with FR is according to the total list price and that it is a lie that FR will start out of T2. If they want to fly out of T2, then they pay the fees of T2...period.
A few hours later several statements came out from the authorities that Leary lied too about them, because they are not giving a single cent to support FR.

This guy is a master of circus making. However it really looks like he overstepped a certain line with many here.

That really gets my blood boiling..... To watch the disastrous demise of our national carrier is one thing, but to watch O’leary dance on the grave of MA is another matter, especially when he is making claims he has no right to. I know, I know… its business and he has every right to start up ops at BUD and strengthen his company but I really dislike his grandstanding. I’m still convinced FR and the Orban regime had this worked out before the grounding of MA.

I saw the press conference on hirado, and when he was asked about the government compensation to FR, his reply was “yes, we got some but it wasn’t enough!”

O’leary was also trying to make compare W6 and MA, suggesting W6 is destined for the same faith.

But if they use T2, will they use the jet bridges or just park on the apron?

Quoting PEET7G (Reply 82):
...and something pretty heartbreaking: MA employees sent out the last ever advertisement of the company. It was in newspapers on Friday and it was payed for by the employees them selves:

Very touching!! The fact that MA staff would use money from their last pay to fund a goodbye ad just speaks to the dedication and commitment of Malev’s former staff.

KrisYYZ
 
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Revelation
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RE: Malev Ceases Operation Part 2

Sun Feb 12, 2012 5:05 pm

Quoting LJ (Reply 81):
When both SN and LX went bust, the initial plans came out within a week. If haven't heard anything regarding such a start up this time. Moreover vultures were circling these airlines for the profitable parts of these companies.

But a lot of time has passed since SN and LX ended up in the LH group, and since that time, a lot of consolidation has happened in Europe (LH group, IAG group, AF-KL group, etc). Is it fair to compare the situation to today? Even if MA is in the same position as were LX and SN, it may be that there just isn't the same opportunities now as there were then.

Quoting PEET7G (Reply 82):
Not really, if the outcome is the total parting out of the assets of the company. Actually one of the scenarios in my head was that they filed for bankruptcy to get rid of the VEB Bank. Unfortunately as time passes by and we see how puzzled our government is, only realizing the impact MA's halt has on the economy...I can see that this was not an organized attempt to save the company

It is shocking that no such plan was at least partially in place.

Thanks for your posts during this difficult and frustrating time.

Quoting ju068 (Reply 83):
I still think the Hungarian government gave up too fast.

Do we know to what degree MA attempted to get government assistance?
Wake up to find out that you are the eyes of the world
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Wake now, discover that you are the song that the morning brings
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L410Turbolet
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RE: Malev Ceases Operation Part 2

Sun Feb 12, 2012 9:23 pm

Quoting krisyyz (Reply 84):
I saw the press conference on hirado, and when he was asked about the government compensation to FR, his reply was “yes, we got some but it wasn’t enough!”

And then you hear him trolling in newspaper interviews about subsidies being the "worst thing ever". I guess that must be subsidies to airlines other than the blue-yellow cancer.

Quoting PEET7G (Reply 82):
We would like to thank every Malev passenger, who in the past 66 years chose us, the national carrier for their travels.

I flew with them in October BUD-MXP... who would've thought it was to be for the last time ever.
 
LJ
Posts: 5380
Joined: Wed Nov 17, 1999 8:28 pm

RE: Malev Ceases Operation Part 2

Sun Feb 12, 2012 9:37 pm

Quoting Revelation (Reply 85):

But a lot of time has passed since SN and LX ended up in the LH group, and since that time, a lot of consolidation has happened in Europe (LH group, IAG group, AF-KL group, etc). Is it fair to compare the situation to today? Even if MA is in the same position as were LX and SN, it may be that there just isn't the same opportunities now as there were then.

Yes the situation is the same. Sabena (2002), Swissair (2001) and Alitalia (2008) could restart because they knew they had the backing of a few multinationals willing to invest in the airline (If I'm not mistaken especially in Swissair's case the Swiss corporate world supported the restart of Swissair). Moreover they had entities which which could take over as soon as the parent went bankrupt (Sabena had DAT, Swissair used Crossair and Alitalia used the Air One AOC). No such provision was taken for MA even though it was clear that MA couldn't survive. Moreover will the Hungarian corporate world invest in MA? They may miss MA, but it's pretty quiet.
 
Joost
Posts: 1877
Joined: Wed Apr 20, 2005 8:27 pm

RE: Malev Ceases Operation Part 2

Sun Feb 12, 2012 10:10 pm

Quoting krisyyz (Reply 79):
The Hungarian government is appreantly helping FR both by pressuring BUD and by giving financial help in order to start up ops in Budapest, quite ironic in my opinion.

Since 2009, BUD has been using an incentive scheme to promote the launch of new route.

Quote:
If an airline decides to add a new short haul destination to the list of cities accessible from Budapest Airport, it does not have to pay landing fees at all for one year, and receives a seventy-five percent discount in the second and 50 percent discount in the third year. (source: http://www.therouteshop.com/budapest...gTab)



So for new FR routes to LBC, FMM and RYG, they will get financial help by a discount on the landing fees. They would have gotten this support before MA's collapse and they still get it now. Each carrier launching new routes are entitled to these discounts.

Additionally, there is a 'route recovery' discount, for carriers who decide to launch discontinued routes during the same season when they were stopped. (75% discount in the first year). Carriers like LH (TXL, HAM) and A3 (ATH) are entitled to these discounts and have most certainly applied for them.

It would be strange if FR would not be eligible for this openly published discounts.

Quoting ju068 (Reply 83):
I still think the Hungarian government gave up too fast. Let's not forget that subsidies are possible for some routes under special circumstances.
European Union allows subsidies for sectors such as tourism or expanding into new markets. This means that the €350 million was the total Malev had received over the past couple of years.
However a lot of the cash was used to open up and promote routes which were unserved from Budapest until Malev launched them.

Incorrect. The EU specified which money was deemed illegal.

Quote:
- The takeover in December 2007 of a €76 million loan granted to Malév in 2003;
- A de facto cash facility in the context of the abortive sale of Malév's Ground Handling subsidiary amounting to HUF 4.3 billion;
- A tax and social debt deferral in the amount of HUF 13.8 billion;
- Two capital increases of HUF 25.4 billion in February 2010 and HUF 5.7 billion in September 2010;
- Shareholder loans granted between May to September 2010 totalling HUF 14.9 billion;
- The conversion of part of these shareholder loans (along with the interest owed thereon) into shares of Malév in September 2010;
Source: http://europa.eu/rapid/pressReleases...=HTML

There is no mention of illegal support for opening new routes, which indeed is, under certain circumstances, allowed. It means that it's very much possible that during the last year, the Hungarian government paid even more to Malev than the amounts specified above.

Quoting krisyyz (Reply 77):
Agreed, although BUD becoming a LCC hub is looking more likely, this sort of move towards basic service will hurt Hungary's business community.

How bad are GVA or MAN for business travelers?

Quoting Revelation (Reply 85):
Even if MA is in the same position as were LX and SN, it may be that there just isn't the same opportunities now as there were then.

A main difference is the market potential from ZRH and BRU, compared to BUD. ZRH is one of the world highest yielding markets, and also the Belgian economy (in terms of disposable income) is about three times as big as Hungary's economy. The amount of long-haul flights from other carriers to BRU and ZRH demonstrate a difference in market demand. The Italian market, for Alitalia, is also considerably bigger than the aviation market from Hungary.

Also, there is one similarity between SN, LX and AZ: all three carriers have struggled very hard after started operations, and all have lost millions. It took LX 4 years to become profitable and they've had a very hard time around 2003-2004, when they sold their LHR slots for cash. SN has struggled to post profits ever since they were launched, and AZ still didn't make a full-year profit.

It's a bad forecast for private investors who are looking for investments...
 
JU068
Posts: 2094
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RE: Malev Ceases Operation Part 2

Mon Feb 13, 2012 9:35 am

Quoting joost (Reply 88):
Incorrect. The EU specified which money was deemed illegal.

The EU specified that all subsidies given to Malev from 2007 to 2010 were illegal ''...flag carrier Malév between 2007 and 2010 in the context of its privatisation and renationalisation constitutes illegal state aid...''.

What I am saying is that the Hungarian government could have advocated that part of these subsidies were in line with the Lisbon Treaty, that is the subsidies related to promotion of Hungarian tourism through Malev but also related to the 27 routes on which Malev held a monopoly, or in other words acted as the only link between those cities.

I would like to remind you that the Lisbon Treaty allows for subsidies in the following fields: Industry, Culture, Protection and Improvement of Human Health, Tourism and Education, Youth and Sport. Naturally all apply under special conditions.

Malev had always offered package tours via their offices/websites throughout their network. Some of these flights were not profitable at first, as is the case with their Belgrade flights. This means that because it is a new, unserved route, whose purpose was to promote Hungarian tourism (among other things) it was entitled to some subsidies.

Even in their press release the EU states only the following:

The takeover in December 2007 of a €76 million loan granted to Malév in 2003;

A de facto cash facility in the context of the abortive sale of Malév's Ground Handling subsidiary amounting to HUF 4.3 billion;

A tax and social debt deferral in the amount of HUF 13.8 billion;

Two capital increases of HUF 25.4 billion in February 2010 and HUF 5.7 billion in September 2010;

Shareholder loans granted between May to September 2010 totalling HUF 14.9 billion;

The conversion of part of these shareholder loans (along with the interest owed thereon) into shares of Malév in September 2010;


But the EU doesn't state what the money was used for, and if part of those funds were used in line with what was written in the Lisbon Treaty. No, they just stepped forward calling all the subsidies illegal, when it might not be the case. Especially not in the case of an airline like Malev which was constantly opening up new markets and reinforcing the old ones.
 
Joost
Posts: 1877
Joined: Wed Apr 20, 2005 8:27 pm

RE: Malev Ceases Operation Part 2

Mon Feb 13, 2012 10:05 am

Quoting ju068 (Reply 89):
What I am saying is that the Hungarian government could have advocated that part of these subsidies were in line with the Lisbon Treaty, that is the subsidies related to promotion of Hungarian tourism through Malev but also related to the 27 routes on which Malev held a monopoly, or in other words acted as the only link between those cities.

I see what you're saying. But in this case, the Hungarian government must be able to demonstrate that these subsidies were available to any carrier willing to do the same; that the subsidies were not just given 'because they were Malev'.

Additionally, if MA already received indirect state aid through the airport subsidies, they might have very well 'consumed' all available state aid.

IMO, such a procedure would only buy some time. The only winners would be lawyers.

Keep in mind, government money isn't 'free' money either. Tax payer's money poured into an ailing carrier could also be spent on education, health care, pensions, etc.

Quoting ju068 (Reply 89):
But the EU doesn't state what the money was used for, and if part of those funds were used in line with what was written in the Lisbon Treaty. No, they just stepped forward calling all the subsidies illegal, when it might not be the case. Especially not in the case of an airline like Malev which was constantly opening up new markets and reinforcing the old ones.

Let's wait for the final, detailed report.

Quote:
The non-confidential version of the decision will be made available under the case number C38/2010 in the State Aid Register on the DG Competition website once any confidentiality issues have been resolved.

More sad news: Hainan just announced cancellation of Budapest services from end March.
 
Tupolev160
Posts: 405
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RE: Malev Ceases Operation Part 2

Mon Feb 13, 2012 1:05 pm

Why shouldn't a state help its carrier? The EU is responsible for Malev's demise.
"In a time of universal deceit, telling the truth becomes a revolutionary act."
 
Thenoflyzone
Posts: 3013
Joined: Sun Jan 07, 2001 4:42 am

RE: Malev Ceases Operation Part 2

Mon Feb 13, 2012 2:03 pm

Quoting joost (Reply 90):
More sad news: Hainan just announced cancellation of Budapest services from end March.

Was to be expected, alongside AA's cancelation.

Thenoflyzone
us Air Traffic Controllers have a good record, we haven't left one up there yet !!
 
krisyyz
Posts: 1303
Joined: Thu Nov 25, 2004 11:04 pm

RE: Malev Ceases Operation Part 2

Mon Feb 13, 2012 2:04 pm

Quoting joost (Reply 90):
More sad news: Hainan just announced cancellation of Budapest services from end March.

Just when you thought it couldn't get any worse!

Quoting joost (Reply 88):
How bad are GVA or MAN for business travelers?
Quoting joost (Reply 88):
So for new FR routes to LBC, FMM and RYG, they will get financial help by a discount on the landing fees. They would have gotten this support before MA's collapse and they still get it now. Each carrier launching new routes are entitled to these discounts.

Additionally, there is a 'route recovery' discount, for carriers who decide to launch discontinued routes during the same season when they were stopped. (75% discount in the first year). Carriers like LH (TXL, HAM) and A3 (ATH) are entitled to these discounts and have most certainly applied for them.

It would be strange if FR would not be eligible for this openly published discounts.

I'm not disagreeing but perception is reality, and the perception in Hungary is that the government is helping FR claim the MA route structure while it somewhat sat on its hands during the final period of operations.

Business travelers from Western Europe have LH, BA and KL/AF, but there are routes from BUD that will be exclusively served by LCC's thereby alienating the business travel. I doubt any CEO or CFO will be jumping on FR, I could be wrong tho..

Quoting L410Turbolet (Reply 86):
And then you hear him trolling in newspaper interviews about subsidies being the "worst thing ever". I guess that must be subsidies to airlines other than the blue-yellow cancer.

  

MA's employees and the general flying public is not giving up on MA, just yet...

http://malevmegmentese.info/declaration.html


KrisYYZ
 
rj777
Posts: 1807
Joined: Sat Dec 02, 2000 1:47 am

RE: Malev Ceases Operation Part 2

Mon Feb 13, 2012 2:39 pm

Ok, that website seems to be a contradiction. At the beginning it says they want to: " take action that is meant to result in Malev Airline’s revival." but further down, it says the want to create: "a new national airline whose name will be later determined by that community." It doesn't sound like they want to SAVE Malev, sounds more like they want to REPLACE it!
 
kl911
Posts: 3981
Joined: Mon Jul 21, 2003 1:10 am

RE: Malev Ceases Operation Part 2

Mon Feb 13, 2012 4:21 pm

Quoting krisyyz (Reply 93):
Business travelers from Western Europe have LH, BA and KL/AF, but there are routes from BUD that will be exclusively served by LCC's thereby alienating the business travel

You are not serious right? I have clients from a large Dutch oil company who often use FR ,U2 and W6 when they are the only point to point carrier. And why not? A seat is a seat, especially for Business travellers LCC should be good since they hardly need any luggage, and the company pays the priority checkin and legroom seats. ( like my company does for me btw. )

So please stop the bs about lcc alienating business travel. Quit often the yactually prefer LCC's , like business travellers living around EIN, they dont have to travel to AMS in rushhour, but can quietly checkin at EIN for the W6 and FR flights to BUD for example.

people tend to forget that often managers etc work in a city, but often live somewhere in the countryside where a local airport with LCC flights might be much more easier then indeed traveling to alarge city airport in rush hour.
 
Aleksandar
Posts: 2941
Joined: Sat Jul 29, 2000 11:43 pm

RE: Malev Ceases Operation Part 2

Mon Feb 13, 2012 9:22 pm

What is going on with Budapest Aircraft Service and their Brasilias? Can they resume some flight, at least to neighboring countries such as Croatia, Serbia, Austria, Romania?
R-E-S-P-E-C-T
 
krisyyz
Posts: 1303
Joined: Thu Nov 25, 2004 11:04 pm

RE: Malev Ceases Operation Part 2

Mon Feb 13, 2012 9:38 pm

Quoting kl911 (Reply 95):
You are not serious right? I have clients from a large Dutch oil company who often use FR ,U2 and W6 when they are the only point to point carrier. And why not? A seat is a seat, especially for Business travellers LCC should be good since they hardly need any luggage, and the company pays the priority checkin and legroom seats. ( like my company does for me btw. )

So please stop the bs about lcc alienating business travel. Quit often the yactually prefer LCC's , like business travellers living around EIN, they dont have to travel to AMS in rushhour, but can quietly checkin at EIN for the W6 and FR flights to BUD for example.

people tend to forget that often managers etc work in a city, but often live somewhere in the countryside where a local airport with LCC flights might be much more easier then indeed traveling to alarge city airport in rush hour.



Some will and some won't. I can't conclusively say that all business "elites" will stop flying to BUD because there is no premium service but you can't say that every business traveller will hop on FR with a big smile either. MA being grounded will hurt Hungary and Budapest.
KrisYYZ

[Edited 2012-02-13 14:01:37]
 
PezySPU
Posts: 281
Joined: Mon Dec 12, 2011 1:27 pm

RE: Malev Ceases Operation Part 2

Mon Feb 13, 2012 10:09 pm

Quoting Aleksandar (Reply 96):
What is going on with Budapest Aircraft Service and their Brasilias? Can they resume some flight, at least to neighboring countries such as Croatia, Serbia, Austria, Romania?

Technically, yes, they have their own AOC, but they don't need to. They did some flying for MA, but that's about it. It's not their business, most of the time they do charters, ad-hoc, VIP, etc.
 
Aleksandar
Posts: 2941
Joined: Sat Jul 29, 2000 11:43 pm

RE: Malev Ceases Operation Part 2

Mon Feb 13, 2012 11:55 pm

Quoting PezySPU (Reply 98):
Technically, yes, they have their own AOC, but they don't need to. They did some flying for MA, but that's about it. It's not their business, most of the time they do charters, ad-hoc, VIP, etc.

Well...I thought if they could be the starting base for a new airline...something like Crossair when Swissair went out of business
R-E-S-P-E-C-T

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