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Malév CEO sees windfall in lower oil prices

Hungary's national carrier Malév targets losses at the operating level this year, but the recent drop in oil prices - which largely determine its profitability - could help the airline's bottom line by year-end, CEO Péter Leonov told business daily Napi Gazdaság.

“We planned losses at the operating level for this year, but...based on the more favorable oil price trend, we now think that we can achieve better results by the end of the year than the losses in the first half,” Leonov said. He noted that the airline would have turned a Ft 1.5 billion profit in H1 had kerosene prices remained at their 2007 levels.

Asked for what the airline would use a €30 million loan it recently took out from Russia's Vnesekonombank, Leonov said to keep its liquidity position, pay for more than Ft 1 billion in one-off costs related to layoffs and finance the purchase of turboprop aircraft. He said Malév paid Ft 9 billion more for kerosene in the first half than in the first six months of 2007.

Leonov said Malév's recently announced decision to remove its Toronto and New York flights from its winter timetable would save it about Ft 4 billion a year.

Leonov said the airline's ground handling and maintenance units, which now operate in Russia too, were expected to generate serious revenue this year. (MTI – Econews)