ČSA to continue making cuts

State-owned Czech Airways (ČSA) is intensifying cost-cutting and restructuring efforts as the company looks at another unprofitable year and continues its search for a strategic partner or buyer.

ČSA is expected to lose between 100 and 300 million Kč for 2011, according to Miroslav Dvořák, CEO of Český aeroholding, the holding company that includes ČSA and Prague Ruzyně Airport. He cited increases in costs, like fuel, as well as a loss in passengers. ČSA saw a 14.5 percent drop in passengers in October as compared to the same month last year.

Speaking Dec. 11 on a Czech Television talk show, Dvořák also elaborated on a comment last week by ČSA President Philippe Moreels, who had said the airline is currently in a "courtship" with a potential buyer. Dvořák said there is less than a 50 percent chance ČSA would find a strategic partner or buyer next year.

ČSA has had a hectic past two weeks as pilots restarted protests after the company transferred 11 aircraft to a daughter company and laid off about 100 pilots, about one-third of their total.

Shortly after, ČSA announced they would cut all their flights from Bratislava for the winter schedule, and airline officials seem doubtful those flights would return in the summer.

"This decision is primarily based on economics," a statement from ČSA said.

"The company decided to take this step because of the decline in Slovak passengers' interest in using these connections and the slump in bookings for the first quarter of next year. The illegal protests by ČSA pilots sped up our decision because after they announced their strike readiness, we had to ensure there was sufficient capacity on scheduled flights dispatched from Prague."

The Czech Airline Pilots Association (CZALPA) has protested the changes at the airline. On one recent day they grounded around 25 flights by having pilots call in sick. Union leaders blame management for incompetence that they say will keep the company in the red and hamper privatization.

The pilots are demanding a "guarantee of the immediate start of the search for a strategic investor for a sale in 2012, proportional representation of CZALPA participation in this process" and a stop to "repression of individual employees and their representatives," CZALPA President Petr Žmolík said.

Pilots have faced significant staff cuts and a 30 percent pay cut over the last two years of restructuring.

The airline is in the second year of a three-year restructuring that was launched after the airline failed to sell, when it was up for privatization. Restructuring included merging the airline with the airport, as well as cutting about 30 percent of employees and the fleet.

Cat Contiguglia can be reached at
ccontiguglia@praguepost.com