Malev Hungarian Airlines (MAL) and China's Hainan Airlines (HNA) are discussing deepening cooperation, said Sandor Laszlo, president of MAL in Beijing on Monday.

Hainan Airlines may participate in helping to rebuild MAL, said Laszlo. But he would not disclose details on a reconstruction plan or its exact date.

HNA officials also said the two sides were negotiating on related issues. MAL will select a satisfactory partner from interested candidates.

HNA launched three weekly flights from Beijing to Budapest last Monday. Under a code-sharing agreement, MAL rented a certain number of seats on board. This was the first continental regular flight for HNA as well as the first direct route linking China and Eastern Europe.

HNA President Chen Feng and MAL signed an agreement in June to carry out broad co-operation on international route development and in other areas. The Hungarian Government also hopes China will help to restore MAL to profitability as it is now making huge losses.

HNA Vice-President Wang Jian said HNA is considering the plan, but there has been no real progress.

Hungary has a big potential as an aviation market but at present it is not operating well. Europe has aviation hubs in cities such as Frankfurt, Paris, London and Amsterdam, but none of them are in Eastern Europe.

As Hungary joined the European Union and developed its national economy, Budapest is expected to become a new hub connecting Europe and Asia.

(China Daily August 11, 2004)