Czech Airlines (CSA), the national carrier owned by Český Aeroholding, Korean Airlines, Travel Service (pending), and Česká pojištovna, has announced a new wave of layoffs in response to a drop in customer interest in flights to Ukraine, post-Soviet states and above all Russia.
The ongoing crisis – and violence – in Ukraine is being blamed for a downturn in the fortunes of the airline, whose strategy has focussed increasingly on markets to the east. Flights to Russian destinations in recent weeks have dropped by 10 percent and flights to Ukraine by 25.
Industry analyst Tomáš Menšík of Cyrrus spoke to Czech TV:
“It is not great news for CSA but I wouldn’t say it was fatal. Of course eastern destinations are important but I don’t think even the downturn, for example, in the Russian economy, would be decisive for the airline... I think this year, we will continue to see operative losses but I also think they will be lower, due to changes in ownership and organisation, than in previous years.”
Five years ago, CSA boasted 1,500 airline flight attendants but count less than one-third of that number today. Marked changes in its fleet and destinations were tied to restructuring and changes in ownership (Korean Airlines bought a 44 percent minority stake in 2013 and exercised an option to buy up another 34 of Czech Airline stock which it sold to equity partner Travel Service Airlines (Travel Service is waiting for EC approval in the buy-up). The changes appeared to promise brighter days ahead but now layoffs are needed again. Czech Airlines confirmed they were letting go some 60 people in flight or administrative positions.
Spokesman Daniel Šabík confirmed that the main reason developments in Ukraine was the number one factor which had led to the move.
“Above all it is the political situation in Ukraine now which has led to a marked drop in bookings on CSA flights to destinations in Russia and former Soviet states.”
Flight attendants earn around 20,000 crowns per month plus bonuses – of the 60 to be let go, 20 reached an agreement with CSA to leave rather than wait for dismissal, making them eligible for severance pay under the existing collective agreement. Forty employees, however, are holding out, and their imminent layoffs forced the unions to respond. The Czech Flight Crews Union has threatened, along with the Union of Transport, to call a strike alert.
It is not the first time CSA has been threatened by a strike: pilots warned of the same back in 2011, refusing to go into the cockpit. There are perhaps still other options available to avert strike action: Travel Service, around a month ago Czech TV reported, offered flight attendants the possibility of jobs on flights until the end of September. But, it is unclear if the offer will be taken up.