Air France-KLM up as it withdraws from Czech Airlines privatisation
Shares in Air France-KLM gained 0.4% yesterday, as the carrier informed the Czech Ministry of Finance of its decision to withdraw from the tender process for the privatisation of Czech Airlines (CSA).
Air France-KLM stated it believes that CSA should focus on developing and implementing a stand-alone recovery plan, aiming at restoring profitability in response to the current economic environment. CSA, clearly disappointed, stated it "understands and respects" the reasons underlying Air France-KLM’s withdrawal, adding that it is "prepared to continue cooperating with Air France-KLM in the SkyTeam Alliance" (see below).
The Czech Government, meanwhile, stated it would “continue in the tender and is not changing its proceedings”, despite only having a single bidder, a consortium of Czech companies, Unimex and Travel Service. The government extended the deadline for the consortium's bid by 15 days until 30-Sep-2009, after which it will submit the sale decision to the caretaker government, just weeks before the Oct-2009 election. The Czech Finance Ministry in Apr-2009 selected Air France-KLM and the Czech consortium as second-round bidders for the carrier, rejecting bids from Aeroflot and Odien. It was previously expected the airline would be sold for up to USD276 million.
Shares in Lufthansa were up 0.8% yesterday, while British Airways’ shares dipped 0.7%.
Europe selected airlines daily share price movements (% change): 19-Aug-09
Czech Airlines can restore its profitability without outside assistance – edited press release
For Czech Airlines (CSA), as for other airlines, the only priority for 2009 is to flexibly respond to the market crisis. CSA trusts that Air France-KLM, as well as CSA itself, will manage their downsizing processes. CSA shares the opinion of Air France-KLM, which it reached on the basis of a profound knowledge of the financial condition and current situation at CSA – that CSA can restore its profitability without outside assistance.
CSA’s management has always declared that all decisions concerning the privatisation are solely matters for the shareholder. The primary task of the CSA management is to manage the airline and ensure its long-term existence and prosperity, regardless of who owns the airline, whether it is the government or a private company. For that reason, the management has successfully implemented the OK 2006-2008 three-year plan for turning around CSA, and prepared the revitalised and profitable corporation for privatisation, which was launched before the outbreak of the crisis.
Since the end of last year, in response to the current developments on the air carriage market that have been caused by the global crisis, it has adopted and implemented a number of measures to overcome the effects of the crisis. These are standard steps that are being taken by other companies, as well, and not only in aviation.
The 2009 Action Plan is being successfully implemented, and the shareholders as well as the parties involved in the privatisation process are being informed regularly, as to its further acceleration. The plan involves a set of drastic downsizing and restructuring measures, which include personnel – measures that are essential for surviving the crisis year of 2009 and for launching CSA’s growth in 2010 and beyond.