Malev begs Hungary's govt for help as it runs out of cash

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Troubled Hungarian flag carrier Malev is drawing up an immediate liquidity plan after announcing that the financing of its activities has become "unviable".

In a statement on its website, Malev said: "In the interest of ensuring continuous operations, [Malev chairman] Janos Berenyi requested Malev management to draw up - by the end of the week - a liquidity plan for the immediate future."

Malev said it has approached its owner, the Hungarian government, with a request "to do everything possible to resolve the situation".

However, it warned that due to the European Commission's recent ruling that the airline must repay a significant amount of state aid granted to it between 2007 and 2010, "the room for manoeuvre of the government is extremely limited".

Malev has reached an agreement with lessor International Lease Finance Corporation (ILFC) which ensures that its aircraft remain "available for continuous operations".

Hungary's government said earlier this month that the operation of an airline based in Budapest "remains a priority objective", adding that negotiations with a strategic investor "are in progress".

Malev was renationalised in 2010, three years after its privatisation. The carrier was sold to Russian-backed AirBridge in 2007 in a privatisation process which the Hungarian government last month described as "one blunder after another".