Wednesday, 23 April 2014

Česká pozice: Four major airlines show interest in ČSA

14 November 2012

Prague, Nov 13 (CTK) - Four large airlines, namely Air France, Turkish Airlines, Etihad Airways from Abu Dhabi and Korean Air, have shown interest in Czech national air carrier CSA, news server Ceska pozice said yesterday, referring to reliable sources.

Air France expressed interest in CSA three years ago already.

Interest shown by these airlines is allegedly the reason why the cabinet of Petr Necas launched its second attempt at privatising CSA right now, the server said.

The Finance Ministry and CSA's parent Cesky aeroholding declined to comment on the information about the companies interested in CSA.

The Czech state plans to sell a maximum of 50 percent minus one share in CSA so as the carrier retains its status of a national airline even after the transaction is completed, according to the server.

The process of selecting a privatisation adviser is being started now. The transaction itself should be concluded by April next year.

"The Finance Ministry will make public the list of bidders at the beginning of December, and will not comment on any speculations until then," Radek Lezatka of the ministry's press department told CTK yesterday.

Michaela Lagronova of Cesky Aeroholding said the company has been in talks with potential buyers for the second year already, but none of the air carriers has shown binding interest in buying into CSA yet.

"The interest of Korean Air in CSA has been talked about for a long time already," Jan Prochazka, an aviation industry analyst from company Cyrrus, said.

The position of Air France-KLM is similar as it cannot be absent from the group of most likely buyers of CSA as the Czech airline's partner and a member of the Sky Team airline alliance, Prochazka said.

But the information about the interest shown by Turkish Airlines, which is in a good shape now and its merger with CSA could work, is a pleasant surprise, according to Prochazka.

In contrast, the merger of CSA and Etihad, which already holds a stake in European airline Air Berlin, seems to be less feasible as CSA no longer has the stamp of exceptionality for the company from the United Arab Emirates, Prochazka added.

The search for a strategic partner for CSA was approved by the cabinet last week. CSA's parent company Cesky aeroholding sent a letter to the world's 50 largest airlines, asking them to submit their bids to buy a stake in CSA.

Czech air carrier Travel Service, which made it into the second round of the tender during the first attempt at privatising CSA, was not among the airlines that were sent the letter from Cesky aeroholding.

"We were not sent a letter, so it seems that we will not be able to take part in it," Jiri Simane, the owner of company Unimex Group and one of the shareholders of Travel Service, told the server.

The procedure is similar as if the US administration wanted to privatise something and sent a letter asking all companies except US ones to express their interest, Simane said.

Petr Kovac, director of company Patria Finance, said his information is that more than five potential partners showed interest in CSA.

"Interest in CSA could be shown by airlines that can use Prague as secondary (European) hub for long-distance transport from the East (Asia) or from the Middle East," Kovac told server

The cabinet was trying to sell the national air carrier in January 2009 already. Four companies, namely Czech grouping Unimex Group/Travel Service, Air France-KLM, company Darofan of the Aeroflot concern and investment group Odien, wanted to buy CSA then.

Only the Czech consortium of Unimex and Travel Servis remained in the second round of the tender. It offered to pay Kc1bn for CSA on condition that the airline's owner's equity is zero at least. In mid-2009, CSA had negative owner's equity of over Kc700m.

Originally, proceeds from CSA's privatisation were expected to reach Kc3bn to Kc5bn. The government later decided not to sell CSA to the consortium.

CSA sustained a pre-tax loss of Kc241m last year. In 2010, the company made a gross profit of Kc76m. However, the profit included proceeds from the sale of long-term assets worth almost Kc2.7bn.

In 2009, CSA posted a Kc3.7bn loss.

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