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MALEV COLLAPSE


Low-cost carriers to fill the void left by Malev in Budapest

By Luc Citrinot, eTN | Feb 04, 2012

Low-cost carriers to fill the void left by Malev in Budapest
Which airline will now fill up Terminal 2's new facilities in Budapest? / Photo: BUD Airport

BUDAPEST, Hungary (eTN) - There will be no necessity for the Hungarian government to look at a new national carrier to fit into the shoes of air carrier Malev. Hungary’s national airline grounded its entire fleet and stopped its activity on Friday morning as it could not face repayment obligations. As soon as the news started to hit all the media around the world, other airlines started to announce their ability to step into Budapest's market by boosting capacities and opening new routes.

The biggest announcement came from Ryanair. In a press conference following Malev’s announcement, Europe’s largest low-cost carrier, Ryanair, declared to base four aircraft from February 17 in the Hungarian capital. The airline pulled out from Hungary to protest against tax hikes from the airport’s authority. Earlier this year, Ryanair already indicated to come back in 2012 with five destinations - Birmingham, Bristol, Dublin, London (Stansted), and Bologna.

With Malev gone, Ryanair sees now an opportunity to become Hungary’s largest carrier. Three aircraft will immediately arrive to Budapest with a fourth Boeing 737-800 being stationed from April. Ryanair plans to fly 31 destinations from the Hungarian capital, the equivalent of two million passengers a year. "This largest ever investment in Hungarian aviation and tourism is subject to reaching final agreement with Budapest Airport today on costs, facilities, and handling," indicated Ryanair Deputy CEO Michael Cawley.

In another press conference on Friday, József Váradi, CEO of Hungarian carrier Wizz Air – Central and Eastern Europe's largest budget airline with 15 bases in the region and 11 million passengers – indicated also to boost capacities by 66 percent. The airline will serve from March 23, destinations boosting the number of weekly flights from 67 to 129. Wizz Air will open Bucharest as a new destination, but according to Mr. Varadi, Wizz Air is also interested in flying to Istanbul, Kiev, Moscow, and Tel Aviv. Wizz Air targets to also transport two million passengers from and to Budapest compared to 1.4 million last year.

Meanwhile, both airlines are unlikely to be a good alternative for business travelers to Malev’s offer, as those types of travelers need more flexibility, as well as arriving in airports located close to their destination. In his press conference, Wizz Air CEO stated that his airline did not want to replace Malev as it did not intend to alter its business model.

Enter then legacy carriers, which are now rushing to boost their presence in Budapest. Lufthansa just announced to open right away two new daily flights to Berlin and Hamburg in addition to its 10 daily flights to Düsseldorf, Frankfurt, and Munich. Both AirBerlin and Tarom are launching daily flights, respectively, to Berlin and Bucharest. British Airways indicated also to study boosting its capacity.

Malev closure happens at a time of high passenger traffic at Budapest airport. Last year, Budapest Airport recorded a traffic increase of 9 percent over 2010, with 8.92 million passengers. New infrastructures were completed last year at a cost of €100 million with the opening of the new Terminal 2 of Skycourt, an integrated shopping and commercial center. However, the ambition of the airport’s authority to turn Budapest into a major Central European hub – passengers in transfer represented 17 percent last year - is definitely in jeopardy for now as Oneworld alliance lost its most precious asset in Budapest.



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