Czech Cabinet approved the sale of a 44% stake in loss-making CSA Czech Airlines to Korean Air on 13-Mar-2013, according to Prime Minister Petr Necas and as reported by ekonomika.idnes.cz. Mr Necas said the move is "a very important step that makes possible the development of CSA and Prague's international airport." “The main goal of this for both parties is to work on the development of Prague airport as a hub and CSA as a carrier so obviously there will be some changes,” CSA said. The contract will reportedly be signed on 09-Apr-2013 and the share handover will likely occur in 1H2013. Korean Air was the only bidder for the state carrier and will reportedly acquire the stake for EUR2.64 million. As previously reported, Czech Finance Minister Miroslav Kalousek has expressed support for the deal, confirming the offer of EUR2.64 million (USD3.44 million) for the 44% stake. The bid was based on an earlier estimate by Ernst & Young that valued the airline at CZK148.5 million (USD7.6 million). Korean Air’s offer met all the conditions and is binding, the Ministry said and Mr Kalousek said he has recommended the proposal to cabinet stating: "I will propose that the cabinet accept this offer. I consider it to be a great opportunity to secure the future for CSA and the Vaclav Havel Airport Prague". Korean Air already operates direct service to Prague, and under the privatisation plan it would make Prague one of its transfer points in Europe. The carrier handled 4.25 million passengers in 2011 and reported a loss of CZK241 million (USD12.19 million) in 2011, the last period for which results are available. The government was willing to sell a majority stake to a European partner or a minority stake to investors elsewhere. If the government at the next meeting approve the offer, a formal agreement could be signed in mid-Apr-2013.
Czech Airlines stake sale to Korean Air approved by Czech Cabinet: report
You may also be interested in the following articles...
CSA Czech Airlines: restructuring, partnerships, and now growth for SkyTeam's smallest airline
One of the five oldest airlines in the world that are still in operation, CSA Czech Airlines is also the smallest airline in SkyTeam by passenger numbers. After several years of losses the airline returned to profit in 2015 and expects another positive result in 2016, albeit below last year's level. CSA Czech Airlines is growing once more this year, after a restructuring programme involving reductions in its fleet, capacity and headcount it has also developed a profitable contract flying business. Together with lower fuel prices, its restructuring has helped to achieve the airline's turnaround.
CSA Czech Airlines has a predominantly European network. Its only intercontinental route is from Prague to Seoul, the hub of its part-owner – codeshare partner and fellow SkyTeam member, Korean Air. Its biggest destination market is Russia, but this is followed by the Western European countries France, Italy and Germany. It has a relatively low share of seats at its hub in Prague, where LCCs have a significant share and Ryanair has opened a base this winter. However, although CSA faces strong competitors on routes to non-SkyTeam hubs, competition is limited elsewhere by its targeting of niche regional routes and its use of codeshare agreements (including with Travel Service, another part owner).
Mongolia aviation: liberalisation, end of MIAT protection needed to drive growth at new airport
Mongolia’s stagnant aviation market is at an important juncture as the country prepares to open a new airport at the capital Ulaanbaatar in May-2018. In order to drive growth and ensure the new airport does not turn into a white elephant, the government needs to adopt a new more liberal aviation policy and stop protecting its flag carrier.
Mongolia’s international market has not grown in the past four years due, in part, to protective policies. In the latest examples of protectionism, Mongolia has refused to allow Kazakhstan’s Air Astana to launch flights and has not approved more capacity for Turkish Airways that is needed for new nonstop flights from Istanbul.
The Mongolian market has huge potential, and increased tourism would have an overall economic benefit far greater than the negative impact on the government owned MIAT Mongolian Airlines from increased competition. With the new airport about to open, it is even more crucial for Mongolia to liberalise – not only by opening up to all interested foreign airlines, but also by ending MIAT’s monopoly on ground handling services and making sure the airport’s charges are low enough to support new flights.