Czech Airlines filed for bankruptcy and applied for reorganization at the Prague Municipal Court. Operations continue!
Last day we announced that the airline Czech Airlines is on the verge of bankruptcy. Here the inevitable has happened. Another European airline declares bankruptcy, victim of the COVID-19 pandemic.
Czech Airlines (CSA), Czech national company with over 97 years of experience, declared bankruptcy and applied for reorganization of the company at the Prague Municipal Court, in accordance with the Czech Insolvency Law.
Czech Airlines has declared bankruptcy
The reorganization request was submitted after all possible ways of resolving the financial situation caused by the global air crisis based on the COVID-19 pandemic were exhausted. The goal of the open process is to save the company and opt for the best solution for creditors.
Representatives of Czech Airlines note that before COVID-19, CSA was a profitable company. "As a result of the pandemic and the extraordinary travel restrictions imposed by governments around the world, the company's economic capacity has been severely affected."
CSA representatives add that, despite the recommendations of the European Commission and the International Air Transport Association (IATA), CSA has not received any financial support from the government, unlike its direct competitors who have received such support from their states. respectively and therefore faced “unequal and unfair competition”.
Apparently, the Czech state refused to participate in the rescue of Czech Airlines, the 5th oldest airline in the world that is still flying.
As of 28 August 2020, Czech Airlines and the parent company Smartwings have asked the Czech government to implement the “COVID-air transport” compensation program, as well as other government programs such as “COVID-Bus”, “COVID-Accommodation” or “COVID- Tourism ”.
They also requested financial support to cover 7.198 flights canceled during the state of emergency established between 14 March 2020 and 24 May 2020, during which time the CSA was forced to suspend its operations.
Czech Airlines operations continue
The parent company Smartwings addresses the current situation under the usual moratorium regime with the support of its creditors. The operation of both companies continues uninterrupted. CSA and SmartWings continue to operate scheduled flights , and both airlines will resume operations on routes to destinations in the relevant countries, in accordance with the imposed epidemiological restrictions.
"The reorganization proposal is the last option to save the company, unless the government of the Czech Republic reconsiders its approach.”. The airline industry is one of the hardest hit by the COVID-19 pandemic. Due to the crisis, CSA and Smartwings had to terminate more than 600 employment contracts and implement various restructuring measures.