CSA turns profit despite insolvency, Russian war on Ukraine a risk for the airline

A320 OK-HEU. Credit: CSAA320 OK-HEU. Credit: CSA

Passengers filed claims worth CZK 400 million, to receive only 100 million. 

In 2021, Czech Airlines turned a profit after a long time. The company earned CZK 55.6 (EUR 2,2 ) million despite insolvency. This follows from the data published by the insolvency administrator.

The airline made a profit despite the fact that revenues from ticket sales were significantly below costs (673 million in revenues, 1.011 billion crowns in operating expense). The company was helped by revenues from the sale of emission allowances. This is also why the carrier had over CZK 200 million in its accounts each month.

In February, Smartwings submitted a reorganization plan that relies on Prague City Air becoming an investor in Czech Airlines. This follows from the published by the court in the insolvency register. The sole owner of Prague City Air is Canaria Travel Group, owned by Jiri Simane’s Unimex Group and the Vik family companies. The Czech owners of Smartwings can thus move into Czech Airlines without the Chinese investor in Smartwings.

Creditors should vote on the reorganization plan on March 28. The new investor, Prague City Air, has warned that the Russian war against Ukraine leads to increased risks that directly affect CSA business. Destinations in Russia and Ukraine are the airline’s key routes and their resumption is now uncertain.
Passengers filed claims worth CZK 400 million, to receive only 100 million.

Grant Thornton Appraisal put the value of CSA at CZK 266 million. The plan provides for more than 50 % satisfaction of two secured creditors: Quiver Beta (CZK 55 million) and Lufthansa Technik (CZK 3 million).

A total of CZK 87–111 million is to be left for passengers with vouchers for air tickets; they have filed claims worth more than CZK 400 million. Those who had tickets and did not fly because of the pandemic will have time to redeem their vouchers until the end of this year’s flight schedule. Other unsecured creditors are to receive CZK 96–120 million. Nothing will be left for shareholders.

Tagy CSA CSA Czech Airlines
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