Czech Airlines (ČSA) has found another source of temporary cash to help support its struggling operations: the sale of its charter air unit, Holiday Czech Airlines.
The purchase of the charter unit for Kč 530 million by the holding company that groups both ČSA and the airport company Letiště Praha together, Český Aeroholding, was confirmed to the news server iDnes.cz on Monday.
It pointed out that a valuation of the charter unit in 2010 has only valued Holiday Czech Airlines at Kč 181 million. Český Aeroholding pointed out that the sale price was based on an updated expert valuation. An inflated payment would open up the Czech state-controlled companies to investigation from the European Commission on suspicion of covert state support.
Since then, however, the main scheduled airlines had announced the transfer of four Airbus aircraft and its fleet of regional aircraft to the charter unit, in part to replace medium-haul large aircraft which were being leased.
The sale will bring much needed cash to ČSA, which is struggling to turnaround its results and land a strategic investor in the face of high fuel prices and economic slowdown in some of its main European markets.
The airline announced during the middle of January a slight improvement in its load factor, the proportion of passengers in relation to kilometers flown of scheduled services, but a drastic reduction in overall passenger numbers, services and destinations. The airline is trying to reposition itself as a bridge for passengers from Russia and the former Soviet Union to the West.