THE Czech Republic's national carrier, CSA, is searching for a new strategic partnership after Air France sold its equity stake in the financially troubled Eastern European airline. The buyout was finalized last Friday, when the Czech government-run Konsolidacni Banka took over Air France's 19.1 percent share holding in CSA, at a cost of $27 million.
CSA reported a loss of about $40 million last year, due in large part to an overzealous expansion plan that led to empty seats on flights and a bloated payroll, industry analysts say. The strategic partnership with Air France began in 1992, with the French carrier paying about $15 million in cash and another $15 million in employee training and other services. At the same time, the European Bank for Reconstruction and Development bought a 19.1 percent stake in CSA. The Czech National Property Fund controls a 49 percent share; small investors hold the rest.
The 1993 loss caused the partnership to deteriorate, as CSA and Air France officials bickered over a rebound strategy. Last year's disclosure that CSA's shares were overvalued caused more problems. Czech officials say they are exploring cooperation agreements with other Western airlines, including British Airways and Swissair.