Air France KLM withdraws from Czech Airlines bidding

Air France KLM withdrew from the tender process for privatization of CSA Czech Airlines, stating that in the current economic environment it believes "CSA might focus on developing and implementing a standalone recovery plan aimed at restoring its profitability."

The Czech government in April selected AF KLM and the Unimex/Travel Service consortium as the finalists to proceed to a second round of bidding for a 91.5% stake in CSA (ATWOnline, April 21). The Czech-Icelandic consortium is now the only remaining bidder and has until Sept. 15 to submit a binding offer. "We're moving forward. . .now we're doing due diligence," a consortium spokesperson told Dow Jones. The group will submit a bid by the mid-September deadline, she added.

AF KLM said that it wishes to strengthen its existing partnership further with CSA (both are SkyTeam members) and to continue to explore any new areas of cooperation that "could be of mutual benefit."

The Czech Ministry of Finance said that the public tender will move forward as scheduled without AF KLM. CSA is planning significant layoffs (ATWOnline, Aug. 6). It said this week that 860 of its 4,600 employees will be let go and the cuts will affect all areas of the company.