MIAMI – Yesterday, the Municipal Court of Prague declared CSA Czech Airlines (OK) bankrupt upon the carrier’s request, and named Inskol & Karvné as administrators for insolvency and debts which run up to US$82m (CZK1,8bn).
According to Zdopravy.cz, creditors must submit claims to the administrator while the Court has called for a creditors meeting in June 2021. In the meantime, the administrator is awaiting a decision as to whether continue operations or revert to the sale of assets.
Judge Petr Pacholik declared that “the debtor is a major air carrier, with a very rich history, which, in the period 2016-2019, had revenues approaching US$457m (CZK 10bn) per year, US$77m (CZK 1,69bn) in 2020, and has more than 500 employees.”
Creditors, Tickets and Aircraft
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. Supplier’s claims amount to US$37m (CZK800m) while passengers debt stands at US$46m (CZK1bn).
After alienation of all ATR aircraft, OK’s fleet is reduced to three aircraft, although Planespotters.com counts only two left, one Airbus A319 and one A320. In the meantime, OK continues to operate normally and, on this subject, Michael Sevcik of Inskol said, “everything is running according to the law, I shall get familiar with the state of the enterprise and shall continue to make decisions on this basis.”
The airline declared that, in case of bankruptcy and the company‘s dissolution, there would be a less interesting solution for creditors than if the carrier continues operations, generating revenues, while awaiting restructuring.
State Aid, Reorganization Plans
Czech Airlines has pointed out that it did not take advantage of state aid while most other European airlines did so. Zdopravy.cz also mentions that “communications with the Czech government do not indicate that an efficient public aid may become available in a near-future although this aid would allow satisfaction to the creditors and avoid a final bankruptcy.”
According to the report, no reorganization plan is at the moment available, although different variants are examined and, as the pandemic evolves, OK could aim to keep its flights to Paris (CDG), Amsterdam (AMS), Moscow (SVO), and Kyiv (IEV) and maximize revenues.
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.
Featured image: Czech Airlines OK-REQ Airbus A319-112. Photo: Ervin Eslami/Airways