Hungarian airline Malev halts operation

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Hungarian airline Malev halts operation

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Hungarian national airline Malev announced it was ceasing to operate as it ran out of cash.

03 February,2012 01:17 pm

At 0500 GMT on February 3, after 66 years of almost continuous operation, Malev will no longer take off, the company said in a statement posted on its website.The immediate reason for the carriers collapse was the rapid loss of liquidity as a result of claims for accelerated payment from Malev partners, chief executive Lorant Limburger said in the statement.On Thursday, Hungarys government moved to prevent a forced grounding of its stricken flag carrier, appointing a receiver and shielding it from creditor claims.The move came after the European Commission ordered Malev on January 9 to repay various forms of state aid received between 2007 and 2010 that amounted to 38 billion forints (130 million euros, $171 million), a sum equal to its entire 2010 revenue.Despite its best interests the owner can no longer provide financial resources for the operation of the airline in the wake of the condemning decision of the European Commission, the statement said.The company informed its passengers at Budapests Liszt Ferenc Airport about the grounding of all Malev flights at 0600GMT. According to Hungarian newswire MTI, 64 Malev flights were scheduled to fly from Budapest on Friday.The carrier employs 2,600 people and is responsible for 40 percent of traffic at the capitals airport. It posted a loss of 24.6 billion forints in 2010, with improved figures forecast for 2011.