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Hungarian national airline cannot pay staff on time  Feb 09, 2009

Budapest - Hungary's cash-strapped national airline Malev told staff on Friday that they would be receiving their wages in two installments this month as it cannot afford to pay in full.

The airline, which was privatised for a token sum in 2007, blamed its inability to meet its payroll costs on the worsening economic situation in Hungary and the global financial crisis.

Malev spokeswoman Krisztina Nemeth said in a statement on Friday that low passenger numbers and a drop in turnover through the winter season were to blame for the company's embarrassing announcement.

Staff will receive just around 200 dollars on Friday, and the remainder of their wage later in the month.

Nemeth added that, despite some delays, Malev had so far always managed to pay the wages of its staff in the month they were due.

The president of the Russian Vneshekonombank, Vladimir Dmitriev, said on Thursday evening that his bank's contribution to 'crisis management' at Malev would depend on how much the Hungarian side is prepared to invest.

Vneshekonombank took control of Malev on January 26 following the bankruptcy of the airline alliance AirUnion, owned by the Russian oligarch Boris Abramovich, which indirectly held the largest, 49 percent stake in Malev.

Fifty-one per cent of Malev remains in the hands of two private Hungarian investors.

'Naturally we are not disinterested with regards to Malev, and we hope that cooperation with a Russian airline will increase passenger numbers and improve other (economic) indicators,' Dmitriev said.

The Russian government announced in late January that the national airline Aeroflot would be a strategic partner in efforts to turn around the failing Hungarian carrier.

Hungarian national airline cannot pay staff on time
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