Ryanair to open base in Budapest

Ryanair is to base four new Boeing 737-800 series aircraft in Budapest Airport opening up 31 routes out of the Hungarian capital in response to yesterday’s collapse of Malev Airlines.

As Irish passengers stranded in Budapest eke out alternative routes home this weekend, Ryanair was quick to announce an open recruitment day in the city next Tuesday, inviting job applications from now redundant Malev pilots, cabin crew and engineers.

Ryanair employs more than 700 Hungarian pilots and cabin crew. About 2m passengers use Budapest Airport every year, while Ryanair believes the facility could support 2,000 jobs.

The airline’s deputy chief executive, Michael Cawley, is today seeking to finalise a deal with airport authorities for what would be the largest ever investment in Hungarian aviation.

Nonetheless, London airline sector analyst Chris Tarry told Bloomberg that Hungary must yet decide whether it can count on carriers such as Ryanair to provide transport links vital to the nation’s economy.

Mr Tarry said: “There is a lot of competition in Budapest, but if you rely on a non-local carrier, they can always take their aircraft away.”

While the Hungarian government is expected to offer a compensation package to victims of the Malev closure, Irish passengers stranded in Hungary were left to make their own way home. More than 100 people were also stranded in Dublin Airport as Malev shut down its fleet of 22 planes having run up debts of 60bn forint (€270m).

This is the EU’s second air transport victim in a week, coming shortly after the collapse of Spanair. Malev’s collapse has coincided with Hungary seeking to revive bailout talks with the IMF and EU to quell investor concern about its ability to service the highest debt level among the trading bloc’s eastern members.

Malev had been operating in bankruptcy protection, having been declared a “strategically important company” on Jan 30, shielding it from creditors. Malev’s earnings have been squeezed by low cost rivals like Wizz Air in Budapest, which has offered stranded passengers one-way flights for €35.

Competition was set to mount this spring in any case, with Ryanair resuming its flights after an 18-month gap.

The grounding of Malev ends a two-decade search for a viable partner since the airline was transformed into a joint stock company in 1992. The last recession halted a 2010 takeover bid by Russian entrepreneur Boris Abramovich, forcing Hungary to re-nationalise Malev, taking a 95% stake.

Earlier this week, chairman Janos Berenyi said it was possible that talks with Hainan Airlines’s parent HNA Group could be revived. The Chinese firm said it was “willing to restart negotiations on a possible bid.”

Meanwhile 15 of Malev’s 22 aircraft were to be “ferried” to Shannon last night, bringing the airport thousands of euro in parking fees.