Hungary's Malev airline says its has ceased operations and grounded all its flights to "minimize damage" after its financial situation became unsustainable.

Malev, a member of the Oneworld airline alliance which also includes American Airlines and British Airways, has debts of around 60 billion forints ($270 million, euro205 million) and has been unable to find new investors.

It stopped all its flights as of 0500 GMT on Friday.

Prime Minister Viktor Orban said on state radio that two Malev planes are still abroad — one in Tel Aviv, the other in Ireland.

Last month, the European Union ordered Malev to repay nearly $400 million in illegal state subsidies received between 2007 and 2010. In 2010, Malev's losses reached $110 million.