Korean Air is Bringing a New Key Partner into CSA – Travel Service
05-Dec-2013 Czech Aeroholding has been informed by Korean Air about its requirement to use option to exercise its right to purchase further 34% of Czech Airline stock from Czech Aeroholding. This step is in accordance with the purchase contract on the sale of 44% of Czech Airline stock signed by Korean Air and Czech Aeroholding in April this year. Korean Air will subsequently sell 34% stake to Travel Service, an air carrier, which will thus become a co-shareholder of Czech Airlines thus joining Korean Air which holds 44% of shares, Czech Aeroholding with the final share of 19.74% and Ceska Pojistovna which will continue to hold its 2.26% share in CSA.
Korean Air explains the decision to exercise its option on further 34% of the CSA shares which is to be subsequently sold to Travel Service by its plan to reinforce its operations in Europe. Working together with Travel Service, the company wishes to make Vaclav Havel Airport Prague its European hub. The entry of Travel Service into CSA will provide Korean Air with connections to approximately 40 new destinations in Europe to which their passengers will be able to fly after their transfer at Vaclav Havel Airport Prague.
As early as in spring of this year, Korean Air purchased 44% of Czech Airlines shares from Czech Aeroholding which it will continue to hold. Now it wishes to use the CSA platform to collaborate with Travel Service. With regard to the fact that Travel Service, the new shareholder, is a Czech air carrier, CSA will not lose the status of the so called national carrier. "We regard the development of Vaclav Havel Airport Prague aiming to make it a Central-European hub as absolutely crucial. The fact that Korean Air is bringing another key partner into Czech Airlines represents a step toward fulfilling this aim. I am convinced this partnership will be advantageous particularly for passengers who, in future, will be able to choose from a more quality product - a wide network of destinations - provided by the three carriers," said Miroslav Dvorak, chairman of the Board of Directors and CEO of Czech Aeroholding.
In spite of the fact that the contractual documentation might be signed as promptly as possible, it will surely include suspensory conditions. This is because the entire transaction is first subject to approval by the competent antitrust authorities, which may take several months before it can take effect.
In the context of changes of the Czech Airlines shareholder structure, Philippe Moreels, the current President and Chairman of the Board, announced its intention to resign from both positions. "I welcome the entry of Travel Service into Czech Airlines and also perceive it as the culmination of the company's intensive four year restructuring period. In this new phase, CSA is going to need some new blood and a change in its management style. Therefore, it is logical that all the shareholders will agree on a new company president after the transaction has been completed. Until then, I will continue to be available and will be working on all the steps necessary allowing the transaction to bring a synergy effect to allthe partners as soon as possible," said Philippe Moreels about his intention to resign from both his positions after the transaction has been approved by antitrust authorities.
After the transaction has been approved by antitrust authorities, the Czech Airlines statutory bodies will continue to consist of three members and their composition will reflect the new shareholder structure of the company.