Andrew Doyle/MUNICH
Hungary has been forced to shelve plans to dispose of a part of its state-owned flag-carrier Malév after failing to attract any bids for the stake on offer - up to 47%.
The country's state holding company APV says the airline will focus instead on securing membership of a global alliance. Another attempt at privatisation will be made "when international market conditions have improved".
According to APV seven firms had originally expressed an interest in bidding. Although it declined to name them, they are understood to have included Air France, KLM, SAirGroup and SAS.
"From the start, the transaction has been affected by the exceptionally adverse financial situation in the international airline industry and the lack of confidence within global alliances," says APV. However, membership of a global alliance remains the "key factor in the national airline's future and successful operation," it adds.
Malév's alliance options appear limited following the success of regional rivals LOT Polish Airlines and CSA Czech Airlines in cementing their own tie-ups. In 1999 Warsaw persuaded Swissair parent SAirGroup to pay a hefty price for 38% of LOT, bringing the carrier under the Qualiflyer Group umbrella, while more recently CSA signed up to spearhead the Air France/Delta Air Lines-led SkyTeam alliance's push into eastern Europe.
Star Alliance, meanwhile, also seems an unlikely home for Malév following Austrian Airlines' entry last year into the Lufthansa/United Airlines-led grouping. The possibility of a link with British Airways remains open, though the UK airline was one of the first to pull out of the bidding process for Malév.
Romania met similar problems in its attempt to offload a stake in its state carrier Tarom late last year, forcing it to abandon the sell-off.
ING Barings director John Marshall, who advised APV on the Malév privatisation, says: "SkyTeam is arguably the only alliance that is still attempting to expand its network aggressively, although this is being done in a very controlled fashion and without necessarily involving an equity participation."
Marshall says the major carriers have become more selective in their investment decisions, and are only buying equity in smaller carriers "where there are major strategic reasons to do so". He adds: "In this region the only successful airline privatisation has been the partial sell-off of LOT."
Source: Flight International
