Rivals swoop in as Hungary's Malev stops flying

The airline, which is 95-percent owned by the state after failed privatization attempts, has a leased fleet of 22 passenger aircraft and employs around 2,600 people. It was placed under creditor protection earlier in the week.

Follow us

All flights were grounded from 0500 GMT on Friday. A Reuters correspondent at the airport estimated there were about 100 people stranded at terminal 2. Malev's early morning announcement was greeted with scornful cheers and applause by passengers.

"They gave us a bottle of water, and they think this will compensate us for the whole ticket?" said 30-year-old Melinda Kis, who was en route to Copenhagen with her husband and four children.

In December, the government warned the potential loss of the airline, which spent about 50 million euros a year on air service charges and real estate fees, could jeopardize the operation of Budapest airport, owned by Germany's Hochtief and four financial partners.

Airport spokesman Mihaly Hardy told Reuters: "There are some estimates that over 20 or 23 routes of Malev will never be served by other airlines."

Pal Volner, state secretary of the Development Ministry said an increase in low-cost airline traffic may help offset the loss of volume due to Malev's failure.

"Should the airport nevertheless face a problem, that will have to be settled in separate negotiations," Volner said.

LOW COST AIRLINES JUMP IN

Irish low-cost airline Ryanair announced 26 new routes from Budapest on Friday in a move to capitalize on the grounding of Malev.

Ryanair, which in January announced plans to fly five routes from Budapest, has increased that to 31, most of which will be operating by April. It said it will base four aircraft in Budapest and carry up to 2 million passengers per year.