Malev’s Problems


An article from ATW online from yesterday:

Alliance membership, new owner have Malev targeting improvement

Friday June 8, 2007Malev Hungarian Airlines said its 2007 business plan will allow it to reduce significantly the operating and pre-tax losses suffered last year.

Buoyed by its membership in oneworld and its recent privatization, it expects to report a HUF7.5 billion ($40.1 million) pre-tax loss this year compared to HUF10.5 billion in 2006, along with an operating loss of HUF5.3 billion that will represent considerable improvement from the HUF10.8 billion deficit suffered last year.

Malev said its gains will be based on “increasing passenger traffic, an even greater market share and the impact on growth in traffic deriving from membership [in oneworld],” which it said will benefit its bottom line by HUF3 billion, in addition to “extremely rigorous cost management.”

New owner AirBridge has agreed to invest €102 million ($137.9 million) in the carrier (ATWOnline, May 7). Malev said its forecasted losses may improve further because its business plan “does not include the concepts of a new investor.” It carried more than 3 million revenue passengers in 2006, nearly 9% more than in the previous year, with revenue increasing 11% to HUF107.9 billion. Costs rose 10% to HUF136.6 billion.

Separately, Malev announced the appointment of former LOT Polish Airlines executive Piotr Ikanowicz as CFO and investment banking specialist Zoltan Mester as chief officer-infrastructural and portfolio management.

Let me add a sort comment to this article: what gives the basis to this estimation in June, when so far nothing has been changed since last year? Summer is the highest season of the travel industry. If the new people have just arrived at the company, they will need a few weeks to get involved in things and besides that the arrival of 2 people cannot change anything especially not within a few months. This summer is over, guys. And I bet this nmber will not be met at the end of the year. But let’s return to this topic then. 🙂

Earlier blog entry about Malev’s descend.

by Szafi

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