Government announces second attempt to sell off Czech Airlines

The Czech government has just announced plans to sell off the country’s national carrier Czech Airlines, or ČSA. A previous attempt to do so in 2009 ended in failure, when one of the two potential buyers that made it to the final round dropped out and the other made an unacceptable bid. Since then ČSA, which has been making a loss for some years, has changed significantly: it has a smaller fleet, fewer routes, and undergone restructuring that has included the hiving off of some daughter companies by its operator Český Aeroholding.

Photo: Tomáš AdamecPhoto: Tomáš Adamec I discussed the planned sell-off with Michal Mejstřík, who is chairman of Český Aeroholding’s supervisory board. What exactly will be different this time round?

“Actually, currently the company is in totally different shape. Originally it was making heavy losses and even received significant state aid.

“But now we have reduced its cost side very significantly. We’ve found a smarter airline alliance and currently I believe that the company is going into positive figures. In the third quarter we have been in positive figures, in operational profit.

“We believe that we will be in operational profit in this highly seasonal business in 2014, or maybe even in 2013.”

What kind of airline would you regard as an ideal strategic partner for Czech Airlines?

Michal Mejstřík, photo: Alžběta ŠvarcováMichal Mejstřík, photo: Alžběta Švarcová “Any international player with long haul. Even a partner [in the SkyTeam alliance] like Air France could fit. Any big airline according to IATA [International Air Transport Association] would also be appropriate, because we believe that Prague, as a hub, might be of interest.

“We currently have a significant number – nearly 50 – international airlines flying back and forth to Prague, so why not have one of those or maybe some new players come in and fly hand in hand with Czech Airlines?”

The minister of finance, Miroslav Kalousek, has said that price won’t be the only criterion. What are the other criteria?

“Business plan, for sure. The idea is really to make Prague a business hub and if that could include the business plan of a potential investor that would be a crucial part of the story.”

I heard you saying in a previous interview that the fact that the city of Prague is such an attractive tourist destination could in itself add to the value of Czech Airlines.

Photo: Anna KrálovcováPhoto: Anna Královcová “Yes, that’s beyond any doubt. Prague is a very nice target destination for many travellers worldwide, and it could bring very many new visitors if there is a direct connection via the partner’s airline.”

In the last attempt to sell of Czech Airlines, [Russia’s] Aeroflot was excluded from the final round. Do you think they would be more acceptable this time round?

“Please, that is not the question to ask – it should be directed to the government and to the Ministry of Finance.”