Privatisation plans for Malev are expected to be finalised shortly

Published: 5/9/2000

According to government spokesman, Gabor Borokai, the details of the privatisation of the Hungarian national airline Malev will be finalised shortly. Malev became state-owned in August 1999, when OTP Bank and the Hungarian Foreign Trading Bank sold 35% of the airline to APV. Privatisation and a strategic partner for the airline have been high on the Hungarian government's agenda. However, this partner will only be allowed to acquire a minority stake in the company to comply with current privatisation legislation. The Hungarian government intends to retain 25% plus one share over the long term and a further 25% stake will remain in national ownership. Several major European airlines have shown interest in Malev but differ in terms of their willingness to commit themselves to the national carrier, with some aiming at a strategic alliance with Malev and others also considering the acquisition of a stake in the company. British Airways and Lufthansa have been interested in Malev for some considerable time while Air France has openly stated its willingness to form an alliance or acquire up to 15% stake in the company. However, Swissair, reported in March to have expressed interest in Malev, has neither confirmed nor denied rumours that it is among Malev's suitors. The State Privatisation and Holding Company (APV) has invited bids to find a lead manager for the privatisation and the tender results are also to be announced soon. APV and the tender winner will develop the privatisation strategy jointly. Selling a stake in the national airline forms part of the government's broader aviation strategy, which is now being finalised. This is aimed at strengthening Hungary's role as a transit country in both air and cargo transportation, including the establishment of Ferihegy Airport as a regional hub, the reorganisation of the Air Traffic and Airport Administration (LRI) and the mid-term development plan of the air traffic infrastructure. The restructuring of LRI will involve the division of the air traffic services, including air traffic management and airport coordination, from the airport operating and commercial activities. However, according to Dr Bela Kiss, head of the General Directorate of Civil Aviation, the strategy does not detail whether or not the state-owned airport operation activities of LRI should be privatised. Two other airports, in Sarmellek and Debrecen, currently used by sport, military and private planes will also have an increased role in air traffic although to what exact purpose has not been specified. www.concise.org 16th March 2000: Interest grows in Malev 7th March 2000: Malev to be privatised

Article ID: 1747