Thursday, January 12, 2012

EC Finds Hungary Provided Illegal Aid to Malév

Earlier this week the European Commission announced that financing Hungary had provided to its flag carrier, Malév Hungarian Airlines, from 2007-2010 did not comply with the requirements of the Treaty on the Functioning of the European Union (TFEU). See European Commission Press Release, Jan. 9, 2012 (available here). Hungary has been ordered to recover the illegal aid from the airline, estimated to be approximately $350 million. See Kurt Hofmann, EC: Malev Must Pay Back Illegal State Aid, Air Transport World, Jan. 10, 2012 (available here). The aid would not have violated the EU's competition rules had the financing been granted on market terms available to a private carrier, or had the aid been accompanied by a restructuring plan that would have qualified the aid for the rescue and restructuring exemption. Unfortunately for Malév, the EC determined that neither of those conditions was satisfied.

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