Czech Airlines seeks state loans but refuses deal to hand shares to Government

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Czech Airlines owner Smartwings said on Monday it is seeking state loans or guarantees, but has no interest in opening the way for the Czech government to take up to 100% control.

Last Saturday, Industry Minister Karel Havlicek had raised the possibility of the Czech state owning up to 100% of Czech Airlines to help it through the coronavirus crisis, which has taken a heavy toll on the global airline industry as planes have been grounded.

Havlicek said on Saturday that state ownership was one of the options, adding a decision should come by the end of June.

Czech Airlines resumed some flights on Monday after a month-and-a-half disruption due to the coronavirus pandemic.

Smartwings is controlled by Czech businessman Jiri Simane and partners, who own 50.1% of the group. Chinese state-owned CITIC holds 49.9%.

Although Smartwings had welcomed talks on possible state support, it said on Monday that it had never had any interest in the government taking a stake in the company.

“Smartwings is asking the state … mainly about a loan or loan guarantee,” it said, adding a guarantee would ease its access to commercial loans.

Havlicek has called the airline, which employs 2,500 people, strategic although the idea of it getting extraordinary help beyond what other companies can receive has been criticised by opposition political parties.

Smartwings, which has a low-cost airline of the same name as well as running charter flights, carried 8.2 million passengers in 2019.

Reuters / Prague Morning

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