Pandemic delivers final blow to troubled Malév GH

MNB

Uskarp / Shutterstock.com

Hungaryʼs government has decided to wind up state-owned ground handling company Malév GH without a legal successor, the Hungarian National Asset Management Company (MNV) told state news wire MTI.

Image by Uskarp / Shutterstock.com

Malév GH, which earlier provided ground handling services to Malév, has "struggled with fundamental financing problems since 2012" when the former national carrier went bust, MNV said, adding that strong competition at Ferenc Liszt International Airport has aggravated the companyʼs liquidity situation.

The ground handling company broke even in 2018, thanks to a reorganization plan launched in 2017, but it remained burdened by accumulated losses, and the impact of the coronavirus pandemic on the air travel industry made the company insolvent by June 2020, MNV said.

MNV noted that the government is prohibited from pumping any more liquidity into the company as the European Commission (EC) has launched a probe to determine whether earlier financing for Malév GH was in line with European Union directives on state aid.

The EC launched the probe in October 2019 to scrutinize some EUR 21 million in support from various state-owned companies for Malev GH

Three years earlier, Malév GH competitor Budport had made a formal complaint arguing that the state support for the company gave it an unfair advantage.

Malév GHʼs average headcount stood at 432 in 2018, public records show.

ADVERTISEMENT

Századvég raises GDP forecast to 7.8% Analysis

Századvég raises GDP forecast to 7.8%

Opposition parties to begin PM candidate primaries Elections

Opposition parties to begin PM candidate primaries

New editor-in-chief at Betone Studio Appointments

New editor-in-chief at Betone Studio

BFK developing regional cycling strategy City

BFK developing regional cycling strategy

SUPPORT THE BUDAPEST BUSINESS JOURNAL

Producing journalism that is worthy of the name is a costly business. For 27 years, the publishers, editors and reporters of the Budapest Business Journal have striven to bring you business news that works, information that you can trust, that is factual, accurate and presented without fear or favor.
Newspaper organizations across the globe have struggled to find a business model that allows them to continue to excel, without compromising their ability to perform. Most recently, some have experimented with the idea of involving their most important stakeholders, their readers.
We would like to offer that same opportunity to our readers. We would like to invite you to help us deliver the quality business journalism you require. Hit our Support the BBJ button and you can choose the how much and how often you send us your contributions.