Court Declares Czech Airlines Bankrupt

Czech Airlines

The Municipal Court in Prague has declared Czech Airlines (ČSA) bankrupt. The air carrier submitted the proposal. The court has appointed Inskol as the insolvency administrator. The June meeting of creditors should decide on the future of the company. It follows from the court’s resolution. The decision was first reported by The airline has debts of around 1.8 billion crowns. The airline continues to operate for the time being.

Since the end of August, CSA has been under a protective moratorium against creditors. Expired at the end of February, the airlines had previously filed a petition with the insolvency court for their reorganization. According to the company, its goal is to save society. The carrier stated in the proposal that it has debts of approximately 1.8 billion crowns, of which one billion within unpaid or unused passenger tickets. The company then owes the rest to suppliers.

The court today upheld the airline’s motion and declared the company bankrupt. At the same time, he gave a two-month deadline to all the company’s creditors who had not yet registered their claims against CSA. The court will then assess all registered receivables in June. A meeting of all creditors should take place immediately after the June court hearing. It should be decided on another solution to CSA’s bankruptcy.

The court entrusted the insolvency administrator with the Karviná company Inskol. It was established in 2018 and dealt with the activities of the insolvency administrator and liquidator. The company should submit a compiled list of all registered creditors to the court in May and a list of all CSA assets. At the same time, it will negotiate with airline borrowers.

The airline was hit by the effects of the coronavirus epidemic and had to cancel many connections during the crisis. The carrier laid off around 300 workers last year due to losses. In February, the company announced to the Labor Office its intention to lay off all 430 employees. In this context, CSA pointed out that this is one of the steps in the planned reorganization, and the intention does not have to mean the dismissal of all employees.

The crisis has also affected the parent company Smartwings, which is now still under a protective moratorium. However, it will probably solve the situation differently; unlike CSA, it is entitled to a COVID Plus program guarantee. He is therefore negotiating a loan with banks, which the state program should cover.

In recent weeks and months, the Smartwings Group, to which CSA belongs, has asked the state for help, pointing to airlines abroad. However, the state does not plan special assistance for the air carrier.