Collapse of Smartwings Could Cost 60,000 Jobs

Prague Morning

A representative of the Smartwings Group, which owns Czech Airlines, says its collapse could threaten up to 60,000 jobs.

Firm ombudsman Vojtěch Lažanský said an analysis he had produced also indicated commercial flying schools in the Czech Republic could be forced out of business if the indebted company went bust.

Government members have spoken about the possibility of the state buying out Smartwings or providing it with some other form of support.

However, opposition politicians and some analysts have criticized the idea, saying it is not a strategic company.

Last week, the Czech Republic’s Industry Minister Karel Havlicek suggested that one way in which the country could help the airline is by entering its ownership structure “up to 100%”.

Finance Minister Alena Schillerova then backed this proposal. Smartwings and Czech Airlines employ 2,500 people in the Czech Republic and have been deemed an organization of strategic importance by their country’s government.

Smartwings has rejected the government’s proposal unequivocally, suggesting that it is asking the state “mainly about a loan or loan guarantee.” The airline has said it has “no interest” in the government acquiring a stake of any kind in Smartwings.

At the moment, the airline is owned by Czech businessman Jiri Simane and partners, who own 50.1% of the group. The remaining 49.9% is owned by CITIC Group Corporation, a state-owned investment vehicle for China. This ownership structure looks set to stay. It is a familiar model in aviation: Etihad owns 49% of Air Serbia, and Qatar Airways owned 49% of Air Italy.

 

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