Czech Airlines

William Malcolm

Czech Airlines Planes Seized Over Unpaid Debts

Czech Airlines Technics (CSAT), a Prague Airport subsidiary, seized two Czech Airlines (CSA) ATR aircraft on Tuesday over unpaid debts. CSA’s parent company Smartwings Group has declared the detention of aircraft illegal and is preparing to take legal action. The airline had to cancel flights due to the situation. The carrier is currently under an extraordinary moratorium against creditors.

CSAT performs aircraft maintenance and repairs at the airport. According to the CSAT spokeswoman, the airlines owe for these and other services. “CSAT proceeded with the utmost caution and exercised this lien specifically on two ATR aircraft, one of which was parked and not currently in service.

We informed the airline’s management of this step and submitted possible solutions,” she said. The carrier has not yet commented on possible solutions. At the same time, she denied that the detention could endanger CSA’s operations, the Smartwings Group owns over 40 aircraft.

However, Smartwings disagreed with the CSAT’s move and declared it illegal. “CSAT violated the principle of an extraordinary moratorium. CSAT’s actions represent unprecedented actions aimed at the liquidation of CSA, a state-controlled company,” said carrier spokeswoman Vladimíra Dufková in a statement.

According to her, the carrier did not receive any warning before the detention. Subsequently, he had to cancel some regular routes on which ATR aircraft flew. “We are taking legal steps in this direction,” Dufková added. There is also a threat of international arbitration because the planes do not belong to CSA. The airlines only operate them.

According to Smartwings, CSAT’s receivables are secured by a security transfer of the aircraft engine’s right and other aircraft technical equipment. According to Dufková, CSAT then acquired part of the receivables through a Czech leasing company transfer.

Smartwings and CSA are currently under a protective moratorium against creditors. It expires at the end of February. The air group is asking the state for help because of this. For CSA, it wants non-repayable support of 1.1 billion crowns. According to groups, the carrier is waiting for insolvency proceedings because airlines are not entitled to support from other subsidy programs. The group is also asking the state for half a billion in compensation for canceled flights last spring.