CSA is not stopping operations, it is restructuring, the company said

CSA is not stopping operations, it is preparing a restructuring to save the company, said company spokeswoman Vladimíra Dufková on Wednesday. Part of the restructuring is the intention of collective redundancies, which the company has notified to the Labor Office in recent days. However, according to the company, this is only an intention and does not necessarily mean the dismissal of all employees. Hospodářské noviny (HN) stated on Wednesday that CSA is going to lay off all 430 employees.

The airline has been hit by the effects of the coronavirus epidemic, but state aid cannot be counted on. The airlines are under a protective moratorium against creditors, which expires at the end of February. “CSA does not stop operations in any case, the restructuring process aimed at rescuing CSA continues. The intention of mass redundancies, which CSA announced to the Labor Office, is one of the steps in the restructuring measures,” Dufková said.

The airlines continue to count on all scheduled flights according to current flight schedules. With regard to the development of the epidemiological situation in individual countries, they also envisage the renewal of some lines. “CSA will continue to operate its flights in the most economical mode with regard to the market situation,” the spokeswoman added.

On Wednesday, HN, chairwoman of the Trade Union of Aircraft Crews Tereza Löffelmanová, informed about the intention of mass redundancies at CSA. “I can confirm that we have received a notice of mass redundancies,” she told the newspaper. According to her, employees do not yet know the plan for how the company wants to survive the coming weeks.

According to the SeznamZprávy server, the Smartwings aviation group, of which Czech Airlines is a part, asked the state for 1.1 billion crowns for CSA in early February. According to Smartwings, CSA is facing insolvency proceedings without state assistance, because the company is not entitled to assistance from the Covid Plus program. Smartwings has previously called on the government to create a compensation program for aviation, from which Smartwings and CSA would probably draw as the only ones. According to the group’s co-owner Jiří Šimáně, the compensation was to cover the canceled flights during the state of emergency last spring, the group estimated the compensation at about half a billion crowns.

In recent days, the Ministry of Transport has stated in connection with possible assistance to Smartwings that it is not preparing a specific form of support for aviation. The Office recalled the Covid Plus program, which also allows companies and transport companies to draw on guarantees. “Smartwings as, as the majority owner of CSA, also has the opportunity to use this program,” said ministry spokesman František Jemelka.

Last summer, CSA announced that it planned to reduce the number of employees by more than 300 by February this year. At that time, the company had about 700 people. Employees were also laid off by sister Smartwings.

According to Šimáně, CSA recorded a loss of about 1.5 billion crowns last year. In addition, they do not have a leasing company that would support them, as happened in the case of Smartwings, said Šimána. A possible bankruptcy and insolvency proceedings may also affect CSA clients who bought tickets from the company for a billion crowns and have not yet used them.