virtualtroy

From the OW site:

oneworldTM has signed a memorandum of understanding with Malév as the first step towards the Hungarian carrier joining the world's leading quality global airline alliance.

The memorandum of understanding provides a framework for continued discussions, aimed at issuing Malév with an invitation to join the alliance as a full member.

The agreement is subject to Malév meeting a number of requirements, including:

Confirmation that it can comply with the full service delivery specifications of the alliance.
Full quality and safety audits.
Delivery of its new business plan.
When these requirements are met, Malév could be expected to join the alliance in 2006.

oneworld Managing Partner John McCulloch said: "oneworld's focus during the past few years has been on helping our member airlines weather the financial turbulence that has rocked this industry, by building revenues and cutting costs. The results of this strategy are reflected in oneworld being the only alliance whose members are collectively profitable.

"Now our member airlines are at the stage where they feel it is sensible for the alliance to recruit in regions where would like to broaden our network. We are delighted that Malév is lining up to fill that role for oneworld in Central and Eastern Europe and look forward to working with its management team towards an invitation for it to join our alliance as soon as possible."

Malév Chief Executive Janos Gönci said: "It is vital for Malév to join a global alliance. In the current state of the airline industry there is no chance of sustainable earnings for a mid-sized network carrier without partners. oneworld membership will immensely broaden the network of Malév and further improve the scope of services and benefits available to all our customers. At the same time we believe we can provide our oneworld partners with significant value through the addition of our strong central and south-east European presence to their global network"

Hungary's Minister of Economy and Transport János Kóka said: "Malév's oneworld membership will definitely boost the number of passengers and improve the competitive position of our national flag carrier, and provide a substantial contribution to the improvement of its financial results. The proposed membership will also enhance the Central European hub role of Budapest Ferihegy International Airport."

Three existing oneworld partners currently serve Malév's Budapest base - Aer Lingus, British Airways and Finnair. Malév itself operates to established oneworld hubs Helsinki, London Heathrow, Madrid, New York, Dublin and Cork.

Malév already has a code-sharing agreement with oneworld partner Finnair. In parallel with its oneworld discussions, Malév will be discussing additional bilateral co-operation with various members of the alliance.


oneworld, its existing partners and Malév will not be providing any further information or updates on these discussions until they are concluded.

keithguy

There's a story on Reuters as well.

"It will take between six to 18 months for us to gain full membership but I'd put it closer to six months than 18 ... everything should be in place by the summer, 2006 schedule," Malev Chief Executive Janos Gonci told a news conference.

wideman

This is certainly good, overdue news. The absence of a central European player has been harmful to OW: I can say for certain that my I bought most recent RTW from Star because of the problem traveling intra-Europe with OW.

number_6

Fantastic news, and presumably tied in to the privatization of Malev (it is still 99% state owned). MA was closely aligned with DL prior to Skyteam, and then that fell apart and OK became the Skyteam member. Rather interesting to see Star having a hub in VIE, Skyteam in PRG and now OW in BUD. There has been a tremendous growth in LCC traffic to BUD in the past year, presumably BUD will operate as a low-fare hub for OW (leaving LHR as the high-fare hub, to BA's delight). Taxes and fees are very low at BUD and the Ferihegy terminal isn't bad for transfers though it is marginal. And weather is usually better at BUD than VIE or PRG which might make it work better as a hub; OW might have lucked into a good solution to their needs.

Gardyloo

Has anybody had a ride lately on MA? What are their products like? We rode on OK for the first time last month and I was quite impressed by the service. Are MA comparable?

mith

isnt MA still for sale? wasnt OS bitting on them?

apostol

MA's services are fine, not exceptional, but nothing to complain about. There are better Y and C options trans-Atlantic (they fly JFK), although C fares can be a good deal off season, but their intra-Europe product is solid. There have been a few rounds of failed privatizations for Malev, and OS was interested to the point of buying a tender, but not sure if they submitted a bid at the end of the day.

number_6

MA is comparable to OK but has an all-Boeing fleet unlike OK's vintage A310 with their cramped J seating. Several failed privatization attempts, both AZ and OS were considered to be close to tendering for MA but it never materialized for many reasons (most irrelevant to their Oneworld membership). It is a surprising development for Oneworld but one that was badly needed. An interesting sidelight of the deal is that MA has been trying to go into the Boeing maintenance business and specializes in some of the plane types that are in the BA fleet -- outsourcing some of BA's maintenance to BUD might be the sweetener that made the deal good for both sides, unlike the last Oneworld LX fiasco.

number_6

Often possible to get MA C fares for under USD 1000. The seating is roughly comparable to AA MD-80 F seats (or BA WT+) but food is good and the technical aspects of operation are excellent (maybe the best of the eastern european airlines). MA also flies YYZ-BUD year-round and has seasonal or charter flights from several other cities in NA. Obviously the value to OW is as a hub for middle and eastern european flights. Looking at flight timings an ORD-BUD flight would work very well for many connections like Moscow, Athens or even further east; the deal probabably hinges on AA flying a couple of 763s or 757s into BUD. Maybe that's where the ZRH flights will go to instead.

jimyvr

According to SkyTeam, MA's service standard did not reach their standard so MALEV was offered as associate member in Sky.

Obviously MALEV isn't amused with that.

See "SkyTeam" entry

I'm not sure whether that's true or there's some sort of breakup under the table but if that's the case why would oneWorld pick MALEV? because OW is desperate these days to expand its network coverage?

number_6

Being a govt owned airline that is trying to privatize means that the dominant factors are political and economic in terms of who is buying them. This had a strong affect on negotiations with the various alliances. In terms of the technical aspects of the airline (plane quality, mechanics ability to service the planes, pilots flying ability, safety record, etc.) Malev is one of the best airlines in the world (certainly in the top 10%) and far better than stellar members of ScaryTeam like KE (DL was banned by the US govt from code-sharing with KE due to the ongoing safety issues, while DL did codeshare with MA for years).
In its current state MA is a prize catch for an eastern european hub. Ferihegy airport needs a lot of investment, presumably part of the deal is that the govt will provide the infrastructure to build out the hub (it makes no sense and will fail without that).

guuzen

May 27, 2005
Britain's largest airport operator BAA formally announced on Friday that it plans to bid for Budapest Airport, the operator of Hungary's main international airport at Ferihegy.
Details: http://news.airwise.com/story/view/1117199265.html

guuzen

May 27, 2005
Hungary's national airline Malev, undergoing privatization, expects stagnating revenues and an operating loss in 2005, but foresees an operating profit by 2006, the company said on Friday.

Malev, which made an operating loss of 4.4 billion forints (USD$21.9 million) on revenues of 123.8 billion forints (USD$xxx million) in 2004, expects its operating loss to narrow to 1.8 billion forints (USD$9 million) in 2005 on improved efficiency, company said.

The firm is also expected to break even or make a slight net profit in 2005 after a net loss of 4.95 billion forints (USD$24.6 million) in 2005, company spokeswoman Adrien Krebsz said.

Malev added that membership in the American Airlines and British Airways-led oneworld airline alliance alone would increase its revenues by between four billion and eight billion forints a year and its net profit by between two billion and four billion forints.

Malev signed a memorandum of understanding earlier this week to join oneworld and may become a full member by the summer of 2006, Malev said earlier.

The government has tried to sell Malev four times since the end of Communism in 1990 but failed each time, including two attempts over the past year.

The loss-making, debt-laden carrier has had trouble attracting investors and government efforts to slim down what analysts say is an oversized work force have met with stiff resistance from unions and opposition parties.

It is now conducting talks in a fifth attempt with potential investors to take over the Central European airline.

Malev has struggled to increase revenues as the proliferation of budget airlines at its Budapest hub has pushed prices down and cut into its market share.

In March, the latest month for which data is available, passenger traffic at Budapest was up 41.8 percent, but low-cost airline traffic rose eight-fold.

(Reuters)

Darren

Great news. My trips on Malev (intra europe) were comfortable and on-time. Very welcome addition as far as I am concerned.

benoit

1) great location for a new OW hub to expand and expedite service to central/eastern europe
2) quality mechanics and boeing service op, saves BA's butt next time their union has them over a barrel (somehow I think this is the real reason they are invited)
3) stewardesses actually provide great service unlike many european airlines with entitlement mentality
4) Malev is a low cost carrier, should survive well amongst vicious competition