Since February, Czech Airlines, which has been in insolvency proceedings, is trimming its corporate workforce down to about 100 employees. The redundancies will affect non-flight personnel.
The Municipal Court in February declared CSA bankrupt.
At the beginning of the year, the airlines had 430 employees, including part-time or maternity leave. “There will have to be some smaller redundancies for non-flight personnel to reach some 90 to 100 people,” he told Šimán’s website. According to him, “just over 100 people” are now active at CSA.
Tereza Löffelmannová from the CSA departments told Deník N that the redundancies occur in small numbers every month. The company has a minimum number of crews so that the company can operate two aircraft. Before the start of the pandemic, the company had almost 20 machines.
CSA has been under a protective moratorium against creditors since the end of last August, which expired at the end of February. The company petitioned the court to reorganize its business at that time.
According to CSA’s filing, it owes approximately 1.8 billion Czech crowns (81.8 million U.S. dollars), of which one billion crowns is unpaid or unused passenger tickets, while the rest is owed to suppliers.
The company will have another court date in June to assess all registered receivables after all creditors register claims against the company, stated a court resolution.
This ruling will also have an effect on the airline’s parent company, Smartwings, which is still under a protective moratorium. Smartwings is expected to handle its situation differently since it is protected by the government’s COVID Plus loan guarantee program.
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.
Due to the declaration of a state of emergency by the government and the introduction of emergency measures related to the spread of coronavirus, Smartwings Group recorded an in-flight drop performance of 95 percent in April to June compared to last year, and more than 80 percent in July and August.
Czech Airlines has approximately 266 creditors, mainly suppliers, as well as 230,000 unused tickets, detained by passengers who could not fly because of the current pandemic.
About Czech Airlines
Founded in 1923, OK is one of the oldest airlines in Europe. Its first flight took off from Prague(PRG), destination Bratislava (BTS), on board of an Aero-14 bi-plane. OK became an IATA member in 1929 and an international carrier with a service destined to Zagreb (ZAG).
In the 1930s, OK connected PRG to Bucharest (OTP), Moscow (SV), Paris (CDG), Rome (FCO) and Budapest (BUD).
The airline became transatlantic in 1960 flying from PRG to Havana (HAV).
In 2004 OK flew to 44 countries and 75 destinations. The carrier has won several awards as Best Airline in Eastern Europe. In 2018, OK was almost entirely acquired (97.7%) from Korean Airlines (KE) by Travel Service, a charter airline owner of LCC Smartwings.