Hungarian Aviation After Malev?

Aleksandar · Sun Jul 22, 2012 7:15 am

It has been eight months since the bankruptcy of Malev and it is obvious that the gap left is just too big. What is going on in Hungarian aviation scene now except that low-cost carriers are doing their best to take the most out of the current situation. Is there any chance to see some new Hungarian carrier that would replace Malev?

IndianicWorld · Sun Jul 22, 2012 7:43 am

As you pointed to there, it is mainly LCC growth that has taken up the slack. There are a few examples of legacy carriers increasing services, but this has far been overshadowed by the LCC flights.

Quoting Aleksandar (Thread starter):
Is there any chance to see some new Hungarian carrier that would replace Malev?

In the world of aviation these days, I don't, especially if its a legacy carrier.

The days each European country had their own flag carrier are disappearing by the day. It just does not stack up anymore.

kl911 · Sun Jul 22, 2012 10:01 am

Quoting Aleksandar (Thread starter):
It has been eight months since the bankruptcy of Malev and it is obvious that the gap left is just too big

Which gap is left to big? The airport said it only misses the 1,5 million transfer passengers, which means point to point is back on its previous level. All European capitals can be reached, and Wizzair already applied for the Moscow, Istanbul and Tel Aviv routes. The amount of nonstop destinations after Malev is actually bigger than before. A lot of airlines have added frequency and routes, Wizzair based more planes at BUD, and FR started ops with a 6 plane base.

krisyyz · Sun Jul 22, 2012 3:19 pm

Quoting Aleksandar (Thread starter):
Is there any chance to see some new Hungarian carrier that would replace Malev?

Well some former MA pilots/FA's and others are still trying to bring a new national carrier to life. But I strongly doubt it will happen. More importantly, the average Hungarian traveler is rapidly becoming accustom to LCC's and the big 3 European carriers for their flying needs.

The political discourse in Hungary, economic "headwinds" and a lack of suitable investors will prevent any new national carrier for being formed in Hungary for years to come.

If anything, I could see BUD becoming a major cargo hub for central Europe. Although the planned increase to landing and other fees at BUD could sabotage that opportunity.

KrisYYZ

krisyyz · Sun Jul 22, 2012 3:33 pm

Quoting Aleksandar (Thread starter):

Just found this article, interesting analysis.

http://www.bbj.hu/business/up-for-th...e-for-a-new-national-airline_63669

KrisYYZ

kl911 · Sun Jul 22, 2012 3:48 pm

Quoting krisyyz (Reply 3):
If anything, I could see BUD becoming a major cargo hub for central Europe. Although the planned increase to landing and other fees at BUD could sabotage that opportunity.

That might happen, we already have Turkish and Qatar with dedicated freighters ( A300F and A310F IIRC ) and Cargolux comes several times a week with the 747F and 748F, although im not sure if that is just for refueling.

Besides those we have the TNT 737, UPS 767 and DHL 757 daily or almost daily.

Ps76 · Sun Jul 22, 2012 5:49 pm

Hi!

If Malev came back it would have to be either as a low cost carrier or as a high value carrier with fares which are low enough to compete with the other LCC's and/or different destinations. There is definitely an advantage in being a national carrier in that people of your country will in general prefer to fly you but you have to be good too. Having had a quick look I don't think there is any regional flying within Hungary as the country is too small. Also looking at Wikipedia the company seemed to go through a lot of different CEO's and management and financing. It seemed to be in a big mess although their debts were nothing compared to those of larger carriers.

They seem to have opened their market to Ryanair which according to an article I read announced 26 new routes from Budapest, increasing from 5 to 21 after Malev collapsed. It also said they would do this with 4 737-800s which seem like a very small number of aircraft for the job. But on the Ryanair Hungary website there are many places you can fly to. Prices start from £5 too which seems pretty cheap. It seems good for the customer but of course not having a national carrier is a blow to national pride and means that all the profits from people flying to and from your country go overseas. Plus as a spotter it is boring to see endless Ryanair and Easyjet.

According to Wikipedia their fleet is being held at Shannon. I have no idea who's paying the parking fees but it can't be that cheap. In my opinion they should sell the aircraft off and try to start afresh another day if they get the chance. The only other country in Europe at the moment without an airline I think is Slovakia and Ryanair (thankfully) still fly to Bratislava.

Anyway I will miss seeing the Malev flights at Gatwick. Maybe they are from a bygone time.

Many thanks.

Pierre

krisyyz · Sun Jul 22, 2012 6:44 pm

Quoting Ps76 (Reply 6):

According to Wikipedia their fleet is being held at Shannon. I have no idea who's paying the parking fees but it can't be that cheap.

There may be a few parked at the ILFC base in SNN. All of MA's former B736s are being scrapped in the US. Most of the 73G,738s have found new homes at UN, QS and others.

KrisYYZ

krisyyz · Sun Jul 22, 2012 7:23 pm

Quoting Ps76 (Reply 6):
Also looking at Wikipedia the company seemed to go through a lot of different CEO's and management and financing. It seemed to be in a big mess although their debts were nothing compared to those of larger carriers.

Hi Pierre,

Yes, all the factors you listed played a part in MA's demise. Not to mention the EU regulations, decades of irresponsible decisions by people (CEO, govt appointees) who had little to no knowledge about the airline industry, government interference and the entire privatization mess.. MA could have been saved, and the shut down of the airline could have been done in "classier" fashion. The true tragedy was the fact MA was doing well, load factors were pretty good and the airline invested in very capable leadership. They had a good plan on how to keep MA viable and operating until a new investor could be found. But that is history now, and Hungary may be without a national carrier for a long time, perhaps forever.

As you mentioned FR and W6 have pretty much filled the void, people fly with their wallet, not their heart. There probably won't be a need for a new, full service national airline in Hungary until Hungarians (and Europeans) have some disposable income and therefore can afford to pay a little extra for a higher standard of service than most LCC offer.

Thanks,

Kristof

Thomas_Jaeger · Mon Jul 23, 2012 3:46 am

Quoting krisyyz (Reply 7):
There may be a few parked at the ILFC base in SNN.

They are all gone and parking fees in SNN are really ILFC's problem and not Malev's. The aircraft have now been distributed as follows:
73G: Transaero (5), Travel Service/Smartwings (2)
738: Eastar Jet (1), Globus (3), Yakutia (1)

kl911 · Mon Jul 23, 2012 6:40 am

Quoting krisyyz (Reply 8):
There probably won't be a need for a new, full service national airline in Hungary until Hungarians (and Europeans) have some disposable income and therefore can afford to pay a little extra for a higher standard of service than most LCC offer.

But even if they have more disposable income, would you pay extra for a max 2 hour flight? What higher standard would you need for a shorthaul flight? For medium and longhaul I agree, but I dont see a new Malev going in that direction.

JU068 · Mon Jul 23, 2012 6:50 am

Quoting kl911 (Reply 10):
But even if they have more disposable income, would you pay extra for a max 2 hour flight? What higher standard would you need for a shorthaul flight? For medium and longhaul I agree, but I dont see a new Malev going in that direction.

Well I guess it all depends on the market. In neighboring Serbia Wizz Air had more difficulties in establishing itself despite Serbia being a relatively poor country. Just the other day they had announced that Rome would be a seasonal route due to low loads (there are 70.000 Serbs living in Italy so there is a substantial O&D market). I guess they got butchered by Jat Airways and Alitalia which together offer double daily flights and offer full service on a 1:35 minute flight.

While some markets might not demand a full service airline for a two hour flight, some other do. I am happy that my country is one that demands it.

Ps76 · Mon Jul 23, 2012 8:03 am

Hi!

Quoting ju068 (Reply 11):
Well I guess it all depends on the market. In neighboring Serbia Wizz Air had more difficulties in establishing itself despite Serbia being a relatively poor country. Just the other day they had announced that Rome would be a seasonal route due to low loads (there are 70.000 Serbs living in Italy so there is a substantial O&D market). I guess they got butchered by Jat Airways and Alitalia which together offer double daily flights and offer full service on a 1:35 minute flight.

While some markets might not demand a full service airline for a two hour flight, some other do. I am happy that my country is one that demands it.

I just had a look on the websites of these three airlines and put in a couple of random dates in August. Prices for Belgrade-Rome were:

JAT 150 Euros (full service)
Alitalia 200 Euros (full service)
Wizz Air 110 Euros (no service)

To me clearly their prices were way too high for a LCC service. Why would you put up with less frequency and no service when you still have to pay 110 Euros. Better just pay a little more for much better. However I disagree that people on this route somehow have a preference for luxury. Everyone likes a good deal. I would bet if Ryanair were there offering LCC flights on the same route for 20 Euros all included they would take a LOT of the business. That's the reason behind the success of the LCC's in Europe. Their prices were just SO much lower. They need to understand that they will only survive if they can keep costs down much better and maintain that massive price difference.

That's my opinion anyway!

Many thanks.

Pierre

Someone83 · Mon Jul 23, 2012 8:20 am

Quoting Thomas_Jaeger (Reply 9):
73G: Transaero (5), Travel Service/Smartwings (2)
738: Eastar Jet (1), Globus (3), Yakutia (1)

Didn't three of the -800 go to S7?

JU068 · Mon Jul 23, 2012 8:36 am

Quoting Ps76 (Reply 12):
To me clearly their prices were way too high for a LCC service. Why would you put up with less frequency and no service when you still have to pay 110 Euros. Better just pay a little more for much better. However I disagree that people on this route somehow have a preference for luxury. Everyone likes a good deal. I would bet if Ryanair were there offering LCC flights on the same route for 20 Euros all included they would take a LOT of the business. That's the reason behind the success of the LCC's in Europe. Their prices were just SO much lower. They need to understand that they will only survive if they can keep costs down much better and maintain that massive price difference.

Not to mention that until recently Wizz Air used to arrive to Belgrade after midnight, which made the flight even less appealing to the general public.
I do agree with you on the fares argument but then again I do know a lot of people who would pay an extra €50 and fly on Jat Airways. JU's advantage is that they fly to main airports and they do have a decent on board product, not to mention that they are quite liberal when it comes to luggage (something that is important to most Serbs).

If we take Jat's numbers for 2012 they seem to be quite impressive:

Month
JAN 74.908 ▲ 8%
FEB 62.289 ▼ 9%
MAR 83.369 ▲ 4%
APR 107.555 ▲ 21%
MAY 122.273 ▲ 16 %
JUN 134.969 ▲ 16 %

So despite Wizz Air's activity in Serbia Jat Airways managed to record impressive passenger growth.

Thomas_Jaeger · Mon Jul 23, 2012 11:51 am

Quoting someone83 (Reply 13):
Didn't three of the -800 go to S7?

They went to Globus, a S7 subsidiary.

kl911 · Mon Jul 23, 2012 12:29 pm

Quoting ju068 (Reply 14):
JU's advantage is that they fly to main airports and they do have a decent on board product

I dont see the advantage. Wizzair flies to Rome's main airport from Belgrade's main airport. Wizzair offers a wide variety of meals and drinks onboard. Its BOB, but 8 euro a flight you have a nice meal and drinks.

Quoting Ps76 (Reply 12):
I just had a look on the websites of these three airlines and put in a couple of random dates in August. Prices for Belgrade-Rome were:

JAT 150 Euros (full service)
Alitalia 200 Euros (full service)
Wizz Air 110 Euros (no service)

After the holiday season the fares are , example, 11-15 Sept.

JAT 150 Euros (full service)
Alitalia 170 Euros (full service)
Wizz Air 55 Euros

Ps76 · Mon Jul 23, 2012 12:45 pm

Hi!

Quoting kl911 (Reply 16):
After the holiday season the fares are , example, 11-15 Sept.

JAT 150 Euros (full service)
Alitalia 170 Euros (full service)
Wizz Air 55 Euros

That's certainly a big improvement. If I had to fly that route with those dates I would definitely pick Wizz Air. However maybe if I was a professional with decent income and not some guy with no job who still lives with his parents I might not!

Many thanks.

Pierre

JU068 · Mon Jul 23, 2012 1:31 pm

Quoting kl911 (Reply 16):
I dont see the advantage. Wizzair flies to Rome's main airport from Belgrade's main airport. Wizzair offers a wide variety of meals and drinks onboard. Its BOB, but 8 euro a flight you have a nice meal and drinks.

Rome is currently the only central airport to which Wizz Air flies from Belgrade. From September when the route is axed they won't be flying to a single centrally located airport from Belgrade.

Quoting kl911 (Reply 16):
JAT 150 Euros (full service)
Alitalia 170 Euros (full service)
Wizz Air 55 Euros

Yes, but Wizz Air is stopping all flights from Belgrade to Rome due to low loads hence why it is normal for them to be the cheapest. Even if they were the cheapest on the market they failed to survive, I guess that says something about the travelling public between Belgrade and Rome.
Also does that fare include luggage with Wizz Air?

[Edited 2012-07-23 06:32:26]

krisyyz · Mon Jul 23, 2012 9:09 pm

Quoting kl911 (Reply 10):

But even if they have more disposable income, would you pay extra for a max 2 hour flight? What higher standard would you need for a shorthaul flight? For medium and longhaul I agree, but I dont see a new Malev going in that direction.

For sure, in fact last time I flew with KL (AMS-BUD) I didn't even take the free sandwich or drink, although I did appreciate the extra legroom.

KrisYYZ

Revelation · Tue Jul 24, 2012 9:40 am

Quoting krisyyz (Reply 3):
More importantly, the average Hungarian traveler is rapidly becoming accustom to LCC's and the big 3 European carriers for their flying needs.

And these same travelers / taxpayers are getting used to not seeing the periodic outlay of funds to support something that is best done by the commercial sector.

Quoting krisyyz (Reply 8):
Not to mention the EU regulations, decades of irresponsible decisions by people (CEO, govt appointees) who had little to no knowledge about the airline industry, government interference and the entire privatization mess..

I get your point that Malev had stabilized by the time of the closing, but it seems these factors were too large a burden.

tommybp251b · Tue Jul 24, 2012 7:45 pm

Hi Everybody,

flew out of BUD on Sunday Evening with 4U. It is really sad to see such a nice new Terminal without Malev. Will the Terminal be expanded as planned in the BUDFuture Project with the A and B Pier? I don't think so.

Any plans to establish a railway station at Terminal 2? Trains are still stopping at T1 train Station. Is there a dedicated Buslink?

On a side note I have some questions about FR operations in BUD.

What the hell is that fence parcour on the apron next to T2 which leads to the parking positions of the FR planes? Isn't that a lil much walking and waiting on an apron, especially in rain and lightning? What will happen in heavy snow? Aren't people not affected by the thrust of aircrafts taxing out from the near 2A Gates. And how do they separate the passengers outside on the apron regarding their flights? Do the planes have a destination panel inside the cockpit window similar to a public bus?

Last question wasn't meant that serious.

Best Regards

Tom

krisyyz · Tue Jul 24, 2012 11:19 pm

Quoting TommyBP251b (Reply 21):

flew out of BUD on Sunday Evening with 4U. It is really sad to see such a nice new Terminal without Malev. Will the Terminal be expanded as planned in the BUDFuture Project with the A and B Pier? I don't think so.

Very sad! I was there in late April and the place was empty. The departure board had 4-5 flights departing within a 3hr span. All future development is on hold, I'm still not sure about "Cargo City" but it wouldn't make much sense to build the new cargo terminal now since T1 is closed and there is lots of space for the cargo ops there.

Quoting TommyBP251b (Reply 21):
What the hell is that fence parcour on the apron next to T2 which leads to the parking positions of the FR planes? Isn't that a lil much walking and waiting on an apron, especially in rain and lightning? What will happen in heavy snow?

That was all over the Hungarian media when I was there. FR obviously prefers not to use airbridges or even buses if possible. There were reports of passenger waiting 40+ minutes in the cold before being able to board the FR flights.
I took some pics of the set-up in my TR (shameless plug) :

Flying The World's Oldest Airline To Budapest (by krisyyz May 1 2012 in Trip Reports)?threadid=215929&searchid=218466&s=oldest+airline#ID218466

KrisYYZ

Ps76 · Wed Jul 25, 2012 11:37 am

Hi!

I was thinking today that maybe instead of restarting Malev someone should start "Hungarian Airlines". Make something distinctly Hungarian with their culture and everything. Of course I'm only a flightsimmer but I think it might be fun!

Many thanks.

Pierre

kl911 · Wed Jul 25, 2012 12:27 pm

Quoting krisyyz (Reply 22):
That was all over the Hungarian media when I was there. FR obviously prefers not to use airbridges or even buses if possible. There were reports of passenger waiting 40+ minutes in the cold before being able to board the FR flights.
I took some pics of the set-up in my TR (shameless plug) :

Same as in Bergamo, and probably other airports. EIN and GRQ in NL have this as well. No big deal, it is actually pretty cool to walk there, and its just a 2 minutes. When it rains , like it did last time wwith my flight to BGY , most if not all people had umbrellas. ( which they needed anyway when waiting for the bus to the airport )

Quoting krisyyz (Reply 22):
Very sad! I was there in late April and the place was empty

Have a look now, sometimes there are lots of flights leaving at the same time, especially since all other LCC's mnoved from T1 to T2 and FR started basing 6 planes there. ( Wizzair also grew to 6 based planes ).

Others, like Germanwings, Norwegian, Jet2, Transavia, Easyjet, Air Berlin and smartwings all commenc3ed operations or increased flights to terminal 2 as wel.

krisyyz · Wed Jul 25, 2012 9:40 pm

Quoting kl911 (Reply 24):
Same as in Bergamo, and probably other airports. EIN and GRQ in NL have this as well. No big deal, it is actually pretty cool to walk there, and its just a 2 minutes. When it rains , like it did last time wwith my flight to BGY , most if not all people had umbrellas. ( which they needed anyway when waiting for the bus to the airport )

For sure, I would love to be so close the aircraft on stand and I appreciate that it's standard practice for FR. I think it was just a new thing and somewhat of a shock to some who experienced this boarding procedure for the 1st time.

Quoting kl911 (Reply 24):
Have a look now, sometimes there are lots of flights leaving at the same time, especially since all other LCC's mnoved from T1 to T2 and FR started basing 6 planes there. ( Wizzair also grew to 6 based planes ).

Others, like Germanwings, Norwegian, Jet2, Transavia, Easyjet, Air Berlin and smartwings all commenc3ed operations or increased flights to terminal 2 as wel.

I'm sure it is busier now with all the LCC ops, is Wizzair using bridges at T2? It would be really nice if LCC ops continued to grow at BUD. It would be interesting to find out if Wizz or FR routes transit pax through BUD now.

KrisYYZ

Aleksandar · Thu Jul 26, 2012 3:43 am

What seems like a problem for BUD is huge drop in number of transit passengers. One should have in mind that MA offered nice services from Europe to the Middle East and nobody jumped in their place.

Quoting kl911 (Reply 2):
he airport said it only misses the 1,5 million transfer passengers,

Only? If every such passenger spent 2 euros, it means a net loss of 3 million euros. It is too much.

JU068 · Thu Jul 26, 2012 6:23 am

Quoting Aleksandar (Reply 26):
Only? If every such passenger spent 2 euros, it means a net loss of 3 million euros. It is too much.

Well, that is what they would spend at the airport, but imagine the amount of money lost through airport taxes. These kind of passengers will never be recaptured by Wizz Air or Ryanair.

Does anyone know if the Hungarian government paid €1.5 billion to the airport as a result of Malév's bankruptcy?

smbukas · Thu Jul 26, 2012 7:55 am

Quoting ju068 (Reply 27):
Does anyone know if the Hungarian government paid €1.5 billion to the airport as a result of Malév's bankruptcy?

You mean this was the debt of Malev to the BUD airport? It might be true, but it is quite big. Maybe government gave a guarantee in Malev desperation in last years? It makes sense.

JU068 · Thu Jul 26, 2012 10:49 am

Quoting smbukas (Reply 28):

No, it was mentioned in the privatization agreement that in case Malev would go bankrupt the Hungarian government would have to pay €1.5 billion.
I guess the investors knew how well Malev was run and wanted to secure their investment. As we can see now they were right.

Aleksandar · Thu Jul 26, 2012 3:04 pm

Quoting ju068 (Reply 27):
Well, that is what they would spend at the airport, but imagine the amount of money lost through airport taxes. These kind of passengers will never be recaptured by Wizz Air or Ryanair.

Exactly...the biggest looser in this game is Liszt Ferenz Airport.

kl911 · Thu Jul 26, 2012 3:12 pm

Quoting ju068 (Reply 27):
Well, that is what they would spend at the airport, but imagine the amount of money lost through airport taxes. These kind of passengers will never be recaptured by Wizz Air or Ryanair.

True, but from experience I can tell you that LCC passengers are big spenders at airports and accomodation and transfers since they save so much having cheap tickets. It always amazes me how much stuff people buy onboard as well.

Revelation · Fri Jul 27, 2012 2:54 pm

Quoting Aleksandar (Reply 26):
What seems like a problem for BUD is huge drop in number of transit passengers.

Yes, it's become a spoke instead of a hub.

It seems it's shaping up into being a pretty decent spoke.

I'm not too sure how much more could be expected in today's climate.

Tupolev160 · Fri Jul 27, 2012 4:08 pm

Regarding JU's case another factor is that many travellers in Serbia are fortunately still very old fashioned: they just love to go to Jat's or AZ's office in the center city, dressed the best they can, sit in the leather chair, give a nice pile of banknotes, receive a smile/attention and get their nice paper ticket to watch until departure instead of doing it all virtually on Wizz Air's website

It's a whole emotional experience! That is why lowcosts have hardship in Slavic countries haha, they're not heart-touching enough...people here pay also for their emotional experience, what is the meaning of the travel if you'll not be able to remember the day you purchased your ticket in some years!
Ok, this is a very pictured example but in essence that's how it is.

Revelation · Fri Jul 27, 2012 4:29 pm

Quoting Tupolev160 (Reply 33):
people here pay also for their emotional experience, what is the meaning of the travel if you'll not be able to remember the day you purchased your ticket in some years!
Ok, this is a very pictured example but in essence that's how it is.

I think they, or their kids, will get over that need.

They'll prefer to spend their money once they get to their destination.

[Edited 2012-07-27 09:44:27]

JU068 · Fri Jul 27, 2012 4:37 pm

Quoting Tupolev160 (Reply 33):
that is why lowcosts have hardship in Slavic countries haha, they're not heart-touching enough

????

Though originally Hungarian (a non-Slavic nation), Wizz Air's first base was in Katowice, Poland. From 2003 to 2012 their fleet grew to 32 aircraft based in the following 'Slavic' cities:

-Belgrade
-Gdansk
-Katowice
-Kiev
-Poznan
-Prague
-Skopje (FYROMians are not really Slavic but ok)
-Sofia
-Warsaw
-Wroclaw

They are going to be entering the Slovenian market soon.

I think lowcosts do not have a particularly hard time in Slavic countries. In Serbia there is a prejudice against them, in addition to a large part of the population not minding to pay more or even pay for a business class fare.

I do not fly on lowcosts and I always try to advise people to pay a bit more and worry less in addition to having more comfort; however I have nothing against people that end up flying on lowcosts.

Wizz Air is just one of many lowcosts flying around the Slavic world. Ryanair has also a very large network in this particular region.

Quoting Tupolev160 (Reply 33):
receive a smile/attention

Yes, post-Communist countries are known for their high level of customer service

JU068 · Fri Jul 27, 2012 4:39 pm

Quoting Revelation (Reply 34):

They have forgotten about it, almost immediately after electronic ticketing was introduced. At least in Serbia, a lot of people tend to pay more for their fare because Jat is quite flexible with luggage but also because it flies into central airports.

Tupolev160 · Sat Jul 28, 2012 2:49 am

Also, between what is offered on European low-costs and Middle-Eastern ones there is a huge gap, an abyss i would say. To take G9 as an example. Besides not serving included food (that can be purchased for a street-stand price and which is of very high quality/quantity) their service, pricing and attitude is the one of a national carrier. 23kg luggage is included in the fare. That is the type of a low-cost airline i would regularly fly, again. FR and others don't even come to my mind when thinking of travel. As for the fares, i remember paying like 40 Eur for SHJ-BEY one-way.
I wonder whether it would have made any significant difference if G9 would have come to BEG instead of FZ. Their direct connecting network is a lot more extensive. In KBP they're "sharing the cake" though, even flying concurrently to some other Ukrainian cities.

[Edited 2012-07-27 19:53:32]

[Edited 2012-07-27 19:54:28]

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