Archive for June 4th, 2007

Malev’s descend

I’ll start blogging with my favorite topic: Malev. I had worked there for 5 years and I was the lucky one, who could recreate and manage the website first, then together with some friends we created the e-commerce solution and the e-ticketing sokution of Malev. Later I managed the project that introduced self check-in kiosks for Malev at the hub airport, Ferihegy.

Recently it has been a big hit in the media that Malev sells over HUF 1 billion (around EUR 4 million) online in a month. If you add it up, it equals 12 billion yearly. The total revenue of Malev is HUF 100 billion per year. This means that 12 billion is exactly 12% of the total sales. I do not have exact numbers in my hands at the moment, but the inimum other European airlines sell online is around 60%. So the question no journalist as ever asked the Malev CEO: why is this number so low? And how can it be that they stand in front of the whole media with such a press release that shows such a pathetic picture? The answer is that because probably no journalist in Hungary knows such trivia about aviation.

When we still worked at malev, we always emphasized the importance of using sales channels in the proper way. An e-ticket sold on the website of the airline is the cheapest ticket for the airline. Therefore the strategy to direct passengers to this sales channel should be very agressive. This is the proper way to keep up competition with low-cost carriers. BA, KL, LH and many other European network carriers who are pressed by the low-cost competition are aware of this and they took the right steps to that direction.

I guess it will take some tme for Malev’s professionals until they realize this. Apparently the new owner, Mr Abramovich, the owner of Air Union did not have any plan when he finally managed to buy the company from the Hungarian state after 2 years of tough fighting, which even included top level politicians. It is amazing how much effort they invested in buying the company, but we still see no point in it as nothing seems to change. The old management, who reached around HUF 16 billion loss last year (16% of the total revenue) is still there, there is no change neither in the bad fleet structure, nor in the schedule, nor in the weak sales activity. Money can still flow out through those wholes that were drilled by the management. I don’t really understand the goal of the new owner, but if the goal is to keep the company, something should be done very urgently.

Well, I hope for my ex colleagues that the goal is not something different.

Blog calendar

June 2007