Hungarian flag carrier Malév hopes to have a strategic airline investor in place by early next year.

Barry Cross/LONDON

The Hungarian state privatisation agency APV, which owns 96.8% of Malév, expects bids from interested airlines in the next couple of months, after which serious negotiations will begin. A source close to the talks said a time-frame of "within the next six months" was possible.

APV plans to offer an equity stake in the airline of 10%, which can rise to 47% through a cash injection. The government will retain a stake of 50%-plus one share. Other parties could also take stakes, as long as the strategic partner remained the largest shareholder, other than APV.

The final selection criteria is still being hammered out, but it is believed that international network and brand strength will be key elements, rather than just the cash injection on offer. The airline is also interested in joining one of the global alliances.

Malév serves 47 destinations from its Budapest hub and its fleet of 27 aircraft carried over two million scheduled passengers in 1999. After the planned retirement of its remaining Tupolev Tu-154s in 2001, Malév's fleet will consist of stage 3/chapter 3-compliant Boeing 767s and 737s, and Fokker F-70s.

The airline has spare capacity to play with at its Budapest's Ferihegy Airport, providing room for growth.

APV is being advised by a consortium including ING Barings, consultants SH&E, and law firm Koves Clifford Chance Ponder.

Source: Airline Business