Czech Airlines

William Malcolm

Czech Airlines Restructuring In Bid To Save Itself

CSA is preparing a restructuring to save the company, company spokeswoman Vladimíra Dufková said today.

Part of the restructuring includes redundancies, which the company has notified the Labor Office in recent days.

However, according to the company, this is only an intention and does not necessarily mean all employees’ dismissal. Hospodářské noviny (HN) writes today that CSA is going to lay off all 430 employees.

The coronavirus epidemic’s effects have hit the airline, but state aid cannot be counted on. The airlines are under a protective moratorium against creditors, which expires at the end of February. “CSA does not stop operations in any case. The restructuring process aimed at rescuing CSA continues. The intention of mass redundancies, which CSA announced to the Labor Office, is one of the steps in the restructuring measures,” said Dufková.

The airlines continue to count on all scheduled flights according to current flight schedules. Concerning the development of the epidemiological situation in individual countries, they also envisage some lines’ renewal.

“CSA will continue to operate its flights in the most economical mode with regard to the market situation,” the spokeswoman added.

Today, HN, the chairwoman of the Trade Union for Aircraft Crews, Tereza Löffelmanová, informed about the intention of mass redundancies in CSA. “I can confirm that we have received a notice of mass redundancies,” she told the newspaper. According to her, employees do not yet know how the company wants to survive in the coming weeks.

According to the SeznamZprávy server, the Smartwings aviation group, of which Czech Airlines is a part, asked the state for 1.1 billion crowns for CSA in early February. According to Smartwings, CSA faces insolvency proceedings without state assistance because the company is not entitled to aid from the Covid Plus program. Smartwings has previously called on the government to create a compensation program for aviation, from which Smartwings and CSA would probably draw as the only ones. According to the co-owner of the group, Jiří Šimáně, the compensation was to cover the canceled flights during the state of emergency in the spring of last year;

In recent days, the Ministry of Transport said in connection with possible assistance for Smartwings that it is not preparing a specific form of aviation support. The Office recalled the Covid Plus program, allowing companies and transport companies to draw on guarantees. “Smartwings as, as the majority owner of CSA, also has the opportunity to use this program,” said ministry spokesman František Jemelka.

Last summer, CSA announced that it planned to reduce the number of employees by more than 300 by February this year. At that time, the company had about 700 people. Sister Smartwings also laid-off employees.

According to Šimáně, CSA recorded a loss of about 1.5 billion crowns last year. They do not have a leasing company that would support them, as happened in the case of Smartwings, said Šimána. A possible bankruptcy and insolvency proceedings may also affect CSA clients who have bought tickets from the company for a billion crowns and have not yet used them.