CSA Czech Airlines (OK, Prague Václav Havel) management says Korean Air (KE, Seoul Incheon) has made a volte-face regarding its financial participation in the Czech carrier's restructuring programme. Airline management said it has received a letter from the Koreans in which they confirmed plans to become financially involved in CSA's stabilization process in addition to a proposal outlining its planned capital contribution.
"Korean Air has conditioned its capital contribution to Czech Airlines by implicit execution of all measures outlined in the company’s restructuring plan. Czech Airlines management will negotiate additional strategic investments in Czech Airlines with all shareholders upon completion of the entry of Travel Service Airlines (Prague Václav Havel) into Czech Airlines," CSA said.
The proposal will be presented to CSA's Czech parent, Czech Aeroholding, for review. Czech Aeroholding, a government-backed aviation holding firm, has indicated its willingness to provide Czech Airlines with fresh capital in the capacity of a private investor.
Korean Air's acquisition of a 44% stake in CSA Czech Airlines in April last year helped the carrier stave off looming bankruptcy at the time. Since then, the onset of the Ukrainian crisis coupled with Europe's decision to impose hard-hitting sanctions on Russia in response for its annexation of the Crimea, have all had severe consequences on the airline's performance resulting in the current restructuring drive.
At an AGM held early last month, shareholders unanimously agreed to the need to trim the carrier's workforce by 270 and its fleet by six A320-200s.
Korean Air holds 44% of CSA shares, Czech Aeroholdings almost 54%, and insurer Česká Pojišťovna some 2.26%. Pending anti-monopoly consent from the European Commission, Russia, Ukraine and Israel, Travel Service will acquire a 34% stake in the airline as well.
