Czech Airlines officialy inform Polish agents about insolvency petition

10 marca 2021

|W Uncategorized, Transportation, Press Release, User-generated, Business travel

What is the message from Czech airlines? Still, a chance that the airline will be solved? and in what form?

CSA has sent to top Polish Iata agents a letter informing about recent development in its organization. On 26 February 2021, Czech Airlines filed a debtor´s insolvency petition together with a petition for approval of reorganization of the company in the Municipal Court of Prague.

Czech Airlines proceeded with this filing mainly due to the continued crisis of the entire aviation industry resulting from the extraordinary measures implemented throughout Europe as a consequence of the SARS-CoV-2 pandemic which significantly limit the possibilities to operate air services, i.e. the principal business of Czech Airlines.

The operation of Czech Airlines flights is not impacted in any way by the insolvency proceeding and our operations will continue as so far.

During this process, however, very strict rules and processes as prescribed by the relevant legislation of the Czech Republic in place continue to apply which have to be observed absolutely by our company. One of them requires that potential and already existing customer requests for reimbursement of funds for tickets and miscellaneous documents issued for additional services shall be claimed under the insolvency proceeding. This applies also to traffic documents in respect of which your company has submitted a Refund Application through BSP Link; in such cases, the reimbursement of funds can be claimed under the insolvency proceeding as well.

Further information will be published on our website in the forthcoming days

Czech Airlines will undertake all possible measures to find the optimal solution to address the current situation and to successfully accomplish the reorganization process. We are confident that all steps made in this respect will allow us to overcome this challenging period.

Please accept our most sincere apologies for any inconveniences caused and thank you for your kind understanding as well as your patience.

Despite the above-stated facts, we will be grateful for your continued loyalty to Czech Airlines and look forward to our continued cooperation.

What could be the future of the Czech carrier? Consequences for PL market ?

We can deduct the airline will be significantly reduced to the only a couple of destinations, essential for business travel purposes. This might be considered by politicians to avoid a sort of scandal regarding losing national carrier. However, maintaining a small airline makes it difficult to think that it will be able to reach the break-even point in the future at all.

The perfect solution might be rather support to the Smartwings company and create fully /100% leisure-oriented airline. Both short and medium/long haul. Business travelers from Czech Republic will be served by large groups lika LHG , AF/KL or BA/IB not underestimating Gulf carrier’s potential.

What might be a consequence for the Polish market? If CSA disappears from Poland , Prague route might become a monopoly one, resulting in an increase of prices. The same happened in the case of BUD while Malev collapsed. Apart of tactical consequences for Polish market, we can also see some strategic ones.

Especially the strategic presence of Korean Air in the Czech Republic /CEE might be redefined. This might be a chance for LOT to look for a closer partnership. As we know Corean side is involved in planning of new central airport in Poland. A couple of months ago some rumors regarding the creation of Pan CEE airline with 2 hubs concept( Warsaw/Prague) was spread across the markets. Difficult to believe during the covid era, but politicians may always surprise us.