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Hungary tries to sell Malév for 7th time

History

The government invited bids yesterday to sell 99.95% of the Budapest-based carrier, to be submitted by November 3, the State Privatization and Holding (ÁPV) Zrt said in an e-mailed statement. Hungary has spent Ft 16.2 billion propping up Malév Zrt over the past six years, yet the airline is still Ft 30 billion in debt and hasn't posted a profit since the 1990s. It is struggling because of surging fuel and labor costs and competition from low-cost carriers like EasyJet Plc and Ryanair Holdings Plc since Hungary joined the European Union in 2004. Malév's future could be ensured by „a well-capitalized investor” who would „significantly” raise the airline's capital, the state agency said in the statement. The country's most recent attempt to sell Malév a year ago was canceled after the government failed to reach an agreement with KrasAir, Russia's fourth-largest airline. Labor unions and politicians complained Malév was being sold for too little. Malév is leaner and more attractive than before after cutting 50% of its workforce and as the airline prepares to join British Airways Plc's Oneworld group CEO János Gönci said in an interview last month. Hungary is also hoping that its sale of Budapest's Ferihegy Airport for £1.26 billion to London-based BAA Plc last December will help lure a buyer for Malév, the airport's biggest customer. (Bloomberg)

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