Czech Airlines' pilots take disruptive action over restructuring

Czech Airlines' pilots have warned of disruptive protest action over the next days following further moves to contract the national carrier

Pilots will protest the spin off of around a third of the aircraft fleet into a daughter company | na serveru Lidovky.cz | aktuální zprávy Pilots will protest the spin off of around a third of the aircraft fleet into a daughter company | foto: © Letiště PrahaČeská pozice
Pilots will protest the spin off of around a third of the aircraft fleet into a daughter company

Pilots at Czech national carrier, Czech Airlines (ČSA), warned Wednesday of protest action over management changes which they argue will whittle the airline down into a company that is no longer worth saving.

Leaders of the pilots’ association CZALPA say members will be encouraged to take sick days off work over the next days in protest at management plans to spin off around a third of the aircraft fleet and operations into a daughter company, Holidays Czech Airlines, which specializes as a charter flight operator. The association has apologized in advance for the likely disruption which will be caused to flights.

“It will just be a matter of time before further changes take place which result in a further reduction of the scheduled airline,” warned CZALPA spokesman Filip Gaspar.  “Eventually, there will be nothing worth saving,” he added.

The 11 aircraft included in the proposed transfer are a strange mixture of four Airbus 320s and seven regional ATR aircraft. “That is essentially the regional operations of CSA,” commented  Gaspar about the ATRs, adding that the pilots did not believe that a national carrier could really exist without some sort of regional services.

‘It will just be a matter of time before further changes take place which result in a further reduction of the scheduled airline.’

Gaspar added that the charter flights company, Holidays Czech Airlines, might be a daughter company of the main airline now but would probably be spun off itself into a stand-alone company in the future.

Pilots would meet over the next days to decide how to step up their protest action, he added.

ČSA pilots warned of a work to rule at the end of July in protest at management plans for further job cuts at the airline and a lack of consultation about the carrier’s future strategy.  The action was eventually cancelled.

Even so, pilots are angry that management, which they say has been dominated in recent years by restructuring experts and managers with no real experience of the airline industry, is conducting a strategy which is firmly fixed on cutting costs even if hardly anything will be left of the airline at the end.

“We want the airline to be privatized and taken over by someone who has experience and knowledge about the aviation sector,” added Gaspar.

Airline management put in place a restructuring plan during 2009 and 2010 which aimed at the carrier making a positive return on capital by the end of this year under the most positive of three scenarios set out then. The worst of the three scenarios did not see this happening until the end of 2015. The restructuring so far has involved a 25 percent reduction in passenger miles, the combination of seats and flight distances, offered by the airline in a bid to increase aircraft occupancy rates to between 66 and 70 percent.

The Czech competition office cleared one aspect of the government’s rescue plan for the sate-controlled carrier, the creation of a state aviation holding company to manage both the country’s main airport operator, Letiště Praha, and ČSA back in October. Competition watchdogs from the European Commission in Brussels are still looking into whether the deal involves illegal state aid.

Czech Airlines announced turnover of Kč 16.5 billion in 2010, down from Kč 19.7 billion in 2009 with the carrier announcing a pre-tax profit of  Kč 76 million compared with a loss of Kč 2.35 billion a year earlier. Financial results giving an indication about how the restructuring program has progressed since have not been made public by the airline or its new parent company, Český Aeroholding.

Privatization plans had been put on hold until there are clear signs that the struggling airline has moved into profit, but that could be a tall order in the short term given the bleak economic outlook.