Czech government in talks to sell flag carrier Ceske Aerolinie

Korean Air

The Czech government is holding early-stage discussions with Korean Air Lines Co Ltd (KRX:003490) and Qatar Airways about the sale of troubled flag carrier Ceske Aerolinie AS, known as Czech Airlines (CSA), prime minister Petr Necas said today.

The cabinet will decide whether to sell CSA as early as April 2013 after considering possible bids from the two airlines, which are expected by the end of January, he said.

The privatisation process started in 2009 after the carrier posted severe losses from an unsuccessful expansion plan. Then, the only suitor, Czech charter airline Travel Service AS, dropped its bid as it was unwilling to buy CSA without getting a capital injection from the government.

CSA, which is owned by the operator of the Prague airport Czech Aeroholding AS, posted a loss of CZK241m (USD12.5m/EUR9.6m) in 2011. Back in September, the European Commission approved a EUR100m (USD130.7m) state aid for the carrier.

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