Another European airline goes bust; 7,000 stranded
Hungary"s Malev Airlines ceased operations early this morning, becoming the second European airline to fold in the past week. Spanish carrier Spanair ceased operations last Friday, stranding about 22,000 passengers.
The grounding of Malev, which has its largest base in Budapest, disrupted about 7,200 passengers, according to media reports. Reuters notes the carrier"s demise ends "66 years of almost continuous service" by the airline, which belongs to the oneworld frequent-flier group that includes -- among others -- American and British Airways.
LAST WEEK: Spanish airline abruptly shuts down, stranding 22,000
Malev faced an increasingly precarious financial situation in recent weeks, but apparently was pushed over the edge early this morning in Tel Aviv. Israeli ground staff servicing a Malev flight around 7 a.m. local time required the airline pay upfront for fueling and other airport services there.
AFP writes that cash-strapped Malev balked, fearing it "would have set a precedent and the airline would have been unable to foot further similar bills, (Malev CEO Lorant Limburger) explained."
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"Every (partner) has asked for payments in advance, and claims accelerated incredibly. No company can honor payments months in advance," Limburger was quoted as saying by AFP.
"We apologize to all our passengers," he added, according to the Associated Press.
In addition to the plane in Israel, another Malev aircraft is apparently stuck in Ireland, where it was not permited to take off because of the airline"s "accumulated debt," AP writes.
Malev said it is working with the government and other carriers to accommodate passengers" holding future tickets on Malev.
As for Malev"s financial woes, AFP reports the airline"s partners became "jittery" this month after the European Commission ordered the airline repay a series of state aid packages that it received between 2007 and 2010.
AFP says "that aid amounted to 38 billion forints (130 million euros, $171 million), a sum equal to its entire 2010 revenue."
AP writes that Malev "has 2,600 employees, many of whom will be laid off soon, the company said without providing