Hungary's national carrier Malev has ceased operations and grounded all its flights due to the inability to cover a $270 million debt after the government stopped financing the airlines.
"The owner, despite the best intentions, is unable to provide additional financial resources to operate after the EU decision. Considering all this, the board decided to order the cessation of operations of Hungary's national airline. We apologise to all our passengers," Malev chief executive officer Lorant Limburger was quoted as saying on Friday in a statement.
Hungarian Prime Minister Viktor Orban said on state radio that two Malev planes were still stuck abroad, one in Israel and one in Ireland, and were not allowed to take off because of the airline's huge debts.
Malev faced the risk of having more of its 22 planes seized by creditors if it were to continue operations, the prime minister said.
In January, the European Union ordered Malev to repay nearly $400 million in illegal state subsidies received between 2007 and 2010.
"It is a painful thing. We tried to keep Malev on track as long as we could, but this is as far as we could go," Orban said.