CSA Announces Further Job Cuts

Czech Airlines

Since February, Czech Airlines, which has been in insolvency proceedings, is trimming its corporate workforce down to about 100 employees. The redundancies will affect non-flight personnel. Czech Airlines, which belongs to the Smartwings Group, has only two aircraft available, one of which is it’s own. The company believes that they will survive thanks to the money from the planned sale of excess emission allowances.

In March, the Municipal Court in Prague declared CSA bankrupt. The carrier submitted the proposal. The court-appointed the Karviná company Inskol as the insolvency administrator. The June meeting of creditors should decide on the future of the company. The airline has debts of around 1.8 billion crowns.

Since the end of August, CSA has been under a protective moratorium against creditors. Expiring 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.

At the beginning of the year, the airlines had 430 employees, including part-time or maternity leave. “There will have to be some smaller redundancies for non-flight personnel to reach some 90 to 100 people,” he told Šimán’s website. According to him, “just over 100 people” are now active at CSA.

Tereza Löffelmannová from the CSA departments told Deník N that the redundancies occur in small numbers every month. The company has a minimum number of crews so that the company can operate two aircraft. Before the start of the pandemic, the company had almost 20 machines.

Löffelmann also stated that the exact numbers of redundancies might be skewed. The company offers employees the opportunity to take annual unpaid leave, which many have taken advantage of.

The 71-year-old businessman also admitted in an interview with Seznam Zprávy that he wanted to leave everything. However, he remains chairman of the board of Smartwings and begins to believe that the parent company could overcome the crisis. “We think that with a significant slowdown inactivity, we can, say next year or maybe in two years, get into a situation where even companies such as CSA will have someone to drive again,” said Šimáně.

Šimán justified the continuation of Smartwings and the end of CSA in insolvency proceedings with differences in the business model of flying companies. “During the year with covid, it became clear that Smartwings, when it comes to flying to summer destinations in combination with regular flights and flying over the winter in Canada and other countries, the model is more viable than CSA, when it comes to flying “business-to-consumer” The CSA model is currently at a disadvantage, as it has dramatically reduced the business clientele and also those who move longer distances from Europe, “Šimáně described.

CSA now has two aircraft, one owned, the other leased. Smartwings have forty aircraft. According to Šimáně, CSA has prepared a draft of the principles of the reorganization plan, and everything will depend on the creditors. CSA primarily wants to maintain flights to Paris, Amsterdam, Moscow, Kyiv, Stockholm, and some other destinations.

CSA is also to raise money for the operation by selling unused emission allowances, which, according to the website, could yield up to 200 million crowns. “To sell allowances, you must make a minimum number of flights and produce the amount of CO2 required by law. If you do not produce it, you are not entitled to allowances, and you must return them to the Ministry of the Environment,” Šimáně warned.

CSA’s total liabilities were estimated at 1.8 billion crowns, of which about a billion is the debt to passengers for non-flown tickets. “The amount will be an order of magnitude lower. There are also commitments to Korean Air or Lufthansa, with which we can negotiate and agree with them on a mutually acceptable solution,” Shimane told the website.