"The European Commission has contacted Hungarian authorities regarding the control and ownership of Hungary's national air carrier Malév Airlines, the European Commission's Directorate-General for Energy and Transport confirmed to ATWOnline on Monday.“The Commission is seeking reassurance that Malév still fulfils all conditions required to be a European Union carrier," Air Transport World has reported.
Doubts regarding the airline's status came after the government last spring sold a 99.95% stake in Malév to AirBridge, a Hungarian company affiliated with Russian carrier KrasAir.
“AirBridge is a holding company member of the Russian AiRUnion-Krasair Group which is considered to be the second largest Russian airline alliance after Aeroflot," DLA Piper Weiss-Tessbach, one of the leading law firms in Central and Eastern Europe that advised AirBridge in its acquisition, said in a press release after the sell-off in April.
In October 2004 Russian airlines KrasAir and Domodedovo Airlines set up a joint management company called AirBridge. KrasAir is owned by the city government of Krasnoyarsk (51%) and AirBridge management (49%) (Boris Abramovich - CEO and his brother, Alexander Abramovich - Deputy CEO).
The AiRUnion alliance, the first of its kind in Russia, was created in 2005, by the combination of KrasAir, Domodedovo Airlines, Omskavia, Samara Airlines and Sibaviatrans. On 3 May this year, the five members of the AirUnion alliance were rolled into a similarly named holding company, OAO AirUnion, in which the Russian government holds no less than 45% of the shares.
"The legislation is very clear. If a carrier is owned more than 49% by non-EU interests and is effectively controlled by non-EU interests, it is no longer a community carrier and it cannot benefit from the single European market," ATWOnline cited Gilles Gantelet, deputy head of Unit F1 responsible for internal market, air transport agreements and multilateral relations, as saying.
He acknowledged that certain companies are established specifically to conform to EU rules, but he would not conclude this is the case with Malév.
Gantelet said they were “in touch" with the Hungarian authorities on the matter, noting it was the responsibility of national authorities to guarantee application of the law and make sure carriers it licenses are EU-owned and controlled.
"Should the European Commission have doubts, we can make an inquiry and we can start an infringement procedure in the European Court of Justice against the respective government for failing to apply EU regulation," he added.
Hungarian newswire MTI contacted the EU's executive body, but EC officials have not yet commented ATWOnline's report.
At the same time, Kornélia Polcz, head of the communications department at the National Transport Authority, told MTI that the European Commission has not launched an official investigation in the issue. Malév officials declined to comment.
Separately, Malév signed on Friday a five-year co-operation agreement with Sukhoi Civil Aircraft, a subsidiary of Sukhoi aircraft manufacturing holding, AiRUnion, and the Bank for Development and Foreign Economic Affairs (Russia).
The deal is for the establishment of a servicing and repair centre for SuperJet 100 (SSJ) in Hungary, and Malév is seen ordering 15 of the new aircraft."
Source: Portfolio Online FInancial Journal
11.12.2007