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EU Approves New State Aid For Czech Airlines  
User currently offlinekl911 From Czech Republic, joined Jul 2003, 5297 posts, RR: 15
Posted (2 years 2 months 4 weeks ago) and read 7896 times:

I thought CSA was doing better now after getting rid of loss making routes. How is the status now? And why allow state aid, I thought that wouldn't happen anymore?

Quote:

"The EU Commission this week gave approval for 100 million euros in state aid to be granted to state-owned Czech Airlines, within a restructuring programme which the regulator said had a reasonable prospect of getting the airline back on track."

source: http://www.reuters.com/article/2012/...-airlines-eu-idUSL5E8KJ8WC20120919

37 replies: All unread, showing first 25:
 
User currently offlineju068 From Vanuatu, joined Aug 2009, 2773 posts, RR: 6
Reply 1, posted (2 years 2 months 3 weeks 6 days 22 hours ago) and read 7681 times:
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The European Union does allow for subventions in case a company is too important for a country and that if it would fail it would cause chaos in the country.
The fact that they have allowed this state aid to be grandted to CSA just goes to prove that the decision in relation to Malev was a joke.


User currently offlinepvjin From Finland, joined Mar 2012, 1405 posts, RR: 0
Reply 2, posted (2 years 2 months 3 weeks 6 days 21 hours ago) and read 7581 times:

Good thing, I would love to see more aid given to proper airlines instead of FR becoming the only real option in many airports.


"A rational army would run away"
User currently offlinebueb0g From United Kingdom, joined Jul 2010, 672 posts, RR: 0
Reply 3, posted (2 years 2 months 3 weeks 6 days 20 hours ago) and read 7518 times:

Quoting kl911 (Thread starter):
And why allow state aid, I thought that wouldn't happen anymore?
Quoting kl911 (Thread starter):
l for 100 million euros in state aid to be granted to state-owned Czech Airlines

It's state owned, as you quoted there. Bailouts won't be given to private companies but there's nothing anybody can do to stop a government giving money to an entity it owns.

Quoting ju068 (Reply 3):
The fact that they have allowed this state aid to be grandted to CSA just goes to prove that the decision in relation to Malev was a joke.

Malev was a private company, CSA is state owned. The comparisons you're making are therefore moot.



Roger roger, what's our vector, victor?
User currently offlineAkiestar From Philippines, joined May 2009, 790 posts, RR: 0
Reply 4, posted (2 years 2 months 3 weeks 6 days 20 hours ago) and read 7481 times:

Quoting bueb0g (Reply 5):
Bailouts won't be given to private companies but there's nothing anybody can do to stop a government giving money to an entity it owns.

I thought the EU stopped the Greeks from subsidizing OA?  

Quoting bueb0g (Reply 5):
Malev was a private company

MA was renationalized in 2010. But as far as I know, it was the renationalization which became the subject of the EU declaring the Hungarian government's "subsidies" to MA illegal.


User currently offlineju068 From Vanuatu, joined Aug 2009, 2773 posts, RR: 6
Reply 5, posted (2 years 2 months 3 weeks 6 days 20 hours ago) and read 7455 times:
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Quoting bueb0g (Reply 5):
Malev was a private company, CSA is state owned. The comparisons you're making are therefore moot.

Not true, Malev was initially privatized and then renationalized after it was severely mismanaged. The cash injection by the Hungarian government was in line with the Lisbon Treaty, since subsidies after mismanagement are allowed.


User currently offlineAesma From France, joined Nov 2009, 6925 posts, RR: 12
Reply 6, posted (2 years 2 months 3 weeks 6 days 18 hours ago) and read 7307 times:

Quoting bueb0g (Reply 5):
It's state owned, as you quoted there. Bailouts won't be given to private companies but there's nothing anybody can do to stop a government giving money to an entity it owns.

EU rules certainly apply to public companies, in fact it's the reason why public companies like utilities and railways are privatized to begin with (in France anyway, in other countries it's political will).



New Technology is the name we give to stuff that doesn't work yet. Douglas Adams
User currently offlinekl911 From Czech Republic, joined Jul 2003, 5297 posts, RR: 15
Reply 7, posted (2 years 2 months 3 weeks 6 days 18 hours ago) and read 7269 times:

But does anyone know if the CSA situation is that bad that they need a cash injection of 100 million right after the summer, with winter still coming? What does this mean for their future?

Quoting pvjin (Reply 2):
Good thing, I would love to see more aid given to proper airlines instead of FR becoming the only real option in many airports.

Well, If CSA would go under FR would never become the only option at PRG. Look at BUD, most other countries airlines just increased capacity, and the lowcost pie was shared between Wizzair ( already at PRG too ) and Ryanair. To a lesser extend also Easyjet, Norwegian, Germanwings, Air Berlin, Transavia. etc etc.

Btw, FR would never want fly to AMS, CDG, LHR etc etc. They aim for a different ( bottom of leisure market.)


User currently offlineBasilFawlty From Netherlands, joined Jun 2009, 1331 posts, RR: 1
Reply 8, posted (2 years 2 months 3 weeks 6 days 18 hours ago) and read 7226 times:

Quoting ju068 (Reply 1):
The European Union does allow for subventions in case a company is too important for a country and that if it would fail it would cause chaos in the country.

Maybe it's just me but I don't see why CSA is so important that state aid is justified? The majority of their routes are also flown by other airlines, so in case CSA would go bust there won't be chaos in my opinion.



'Every year donkeys and mules kill more people than plane crashes'
User currently offlineju068 From Vanuatu, joined Aug 2009, 2773 posts, RR: 6
Reply 9, posted (2 years 2 months 3 weeks 6 days 18 hours ago) and read 7223 times:
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Quoting BasilFawlty (Reply 8):

It is not only about linking Prague with other cities but it has to do with the number of jobs CSA provides and what its roles is within the Czech economy.


User currently offlineBasilFawlty From Netherlands, joined Jun 2009, 1331 posts, RR: 1
Reply 10, posted (2 years 2 months 3 weeks 6 days 18 hours ago) and read 7196 times:

Quoting ju068 (Reply 9):
It is not only about linking Prague with other cities but it has to do with the number of jobs CSA provides and what its roles is within the Czech economy.

So around 4500-5000 job losses on a population of 10.5 million would create chaos?   Most of the CSA employees will find new jobs because if CSA goes bust I'm quite sure that Wizz Air and Smart Wings/Travel Service will expand their operations and I wouldn't rule out a new base of FR or EZY either.



'Every year donkeys and mules kill more people than plane crashes'
User currently offlinekl911 From Czech Republic, joined Jul 2003, 5297 posts, RR: 15
Reply 11, posted (2 years 2 months 3 weeks 6 days 18 hours ago) and read 7196 times:

Quoting BasilFawlty (Reply 8):
Maybe it's just me but I don't see why CSA is so important that state aid is justified?

They are not. Actually, they are dropping routes all over the place, Helsinki its latest victim, other examples were Athens, Tel Aviv, Sofia, Baku and all Intercontinental routes.


User currently offlinekl911 From Czech Republic, joined Jul 2003, 5297 posts, RR: 15
Reply 12, posted (2 years 2 months 3 weeks 6 days 18 hours ago) and read 7191 times:

Quoting BasilFawlty (Reply 10):
So around 4500-5000 job losses on a population of 10.5 million would create chaos? Most of the CSA employees will find new jobs because if CSA goes bust I'm quite sure that Wizz Air and Smart Wings/Travel Service will expand their operations and I wouldn't rule out a new base of FR or EZY either.

FR opening a base is a given, and Wizzair will follow immediately. Have a look at the Ryanair routemap from example Stansted. There is one large gap in Europe and Prague is right in the middle.


User currently offlineju068 From Vanuatu, joined Aug 2009, 2773 posts, RR: 6
Reply 13, posted (2 years 2 months 3 weeks 6 days 17 hours ago) and read 7178 times:
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Quoting BasilFawlty (Reply 10):

Well, CSA also provides jobs indirectly to smaller companies. I am sure that there the Czech government has more insight than both of us and that they know why they can't afford to lose it.

Quoting kl911 (Reply 11):
other examples were Athens, Tel Aviv, Sofia, Baku and all Intercontinental routes.

If I remember correctly they got the keep Tel Aviv. The only reason they were suspending the route was because the rights were granted to Travel Service.


User currently offlinekl911 From Czech Republic, joined Jul 2003, 5297 posts, RR: 15
Reply 14, posted (2 years 2 months 3 weeks 6 days 17 hours ago) and read 7152 times:

Quoting ju068 (Reply 13):
Well, CSA also provides jobs indirectly to smaller companies.

Any other airline starting a base there would need those smaller companies, from catering, transport, shops to maintenance.


User currently offlinepu From Sweden, joined Dec 2011, 768 posts, RR: 13
Reply 15, posted (2 years 2 months 3 weeks 6 days 17 hours ago) and read 7081 times:

Quoting BasilFawlty (Reply 8):
Maybe it's just me but I don't see why CSA is so important that state aid is justified?

Airlines are highly visible and a matter of national pride. All the important-respectable nations have their own, therefore if a country loses theirs, it kind of says they are less relevant (and subservient to other countries for air service).

Quoting ju068 (Reply 9):
number of jobs

I am sure that is part of the political-economic argument to the EU and Czech people. But if jobs are a concern I would tell Volkswagen or Apple they can have 100 million euros free of charge to build a new factory in suburban Prague, perhaps on the old CSA properties. Much better use of any free money the Czech government is giving away.

Pu


User currently offlinekl911 From Czech Republic, joined Jul 2003, 5297 posts, RR: 15
Reply 16, posted (2 years 2 months 3 weeks 6 days 16 hours ago) and read 7012 times:

Quoting pu (Reply 15):
Airlines are highly visible and a matter of national pride. All the important-respectable nations have their own, therefore if a country loses theirs, it kind of says they are less relevant (and subservient to other countries for air service).

Not really, KLM is French, Brussels Airlines, Swiss and Austrian are German, and Iberia is British.  


User currently offlineAesma From France, joined Nov 2009, 6925 posts, RR: 12
Reply 17, posted (2 years 2 months 3 weeks 6 days 15 hours ago) and read 6941 times:

I'd say you just proved his point. The Dutch want to have an airline looking Dutch even if in reality it's French.


New Technology is the name we give to stuff that doesn't work yet. Douglas Adams
User currently offlinekl911 From Czech Republic, joined Jul 2003, 5297 posts, RR: 15
Reply 18, posted (2 years 2 months 3 weeks 6 days 15 hours ago) and read 6920 times:

Quoting Aesma (Reply 17):
. The Dutch want to have an airline looking Dutch even if in reality it's French

Trust me, we couldnt care less. Lowest fare, frequency and or journey time are important in choosing an airline, not national pride. In Holland we are actually very Pro EU. ( Yes, I am Dutch. )


User currently offlinegr09 From Czech Republic, joined Jul 2008, 115 posts, RR: 0
Reply 19, posted (2 years 2 months 3 weeks 6 days 15 hours ago) and read 6895 times:

I think this is a misunderstanding. The EUR100 million is an old state subvention that had taken account in 2009. EU has just legalized it now.

Quoting kl911 (Reply 18):
Yes, I am Dutch

Why do you use a Hungarian flag then? Maybe I'm mistaken but I thought the flags are per nationality.



[Edited 2012-09-22 12:26:23]

User currently offlineAirGabon From Switzerland, joined exactly 11 years ago today! , 892 posts, RR: 2
Reply 20, posted (2 years 2 months 3 weeks 6 days 14 hours ago) and read 6861 times:

Quoting kl911 (Reply 16):
Not really, KLM is French

KLM is not French, it's part of the holding AF-KL based in Amsterdam under Dutch laws.


User currently offlinekl911 From Czech Republic, joined Jul 2003, 5297 posts, RR: 15
Reply 21, posted (2 years 2 months 3 weeks 6 days 14 hours ago) and read 6817 times:

Quoting gr09 (Reply 19):
Why do you use a Hungarian flag then? Maybe I'm mistaken but I thought the flags are per nationality.

Well, I noticed a lot do it to point out where they live and work. So did I.


User currently offlineju068 From Vanuatu, joined Aug 2009, 2773 posts, RR: 6
Reply 22, posted (2 years 2 months 3 weeks 6 days 13 hours ago) and read 6782 times:
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Quoting kl911 (Reply 18):
Trust me, we couldnt care less. Lowest fare, frequency and or journey time are important in choosing an airline, not national pride

Maybe you can speak for yourself, I have a lot of Dutch friends and they are all very proud to have KLM, they epecially love the ''Flying Dutchman'' on the side of the planes.


User currently offlinepesit4a From Ireland, joined Jul 2012, 119 posts, RR: 0
Reply 23, posted (2 years 2 months 3 weeks 6 days 13 hours ago) and read 6757 times:

Quoting ju068 (Reply 22):

I must agree with you! Having lived in NL, most Dutch people are very protective of KLM's Dutch heritage.

KLM is Holland's Glorie!



You just can't keep a good man down!
User currently offlinebrilondon From Canada, joined Aug 2005, 4414 posts, RR: 2
Reply 24, posted (2 years 2 months 3 weeks 6 days 12 hours ago) and read 6487 times:

Quoting Aesma (Reply 17):

I'd say you just proved his point. The Dutch want to have an airline looking Dutch even if in reality it's French.

As far as I know KL is still a Dutch owned company and the Dutch are very proud of their airline.



Rush for ever; Yankees all the way!!
25 pu : I for one rest easier knowing no matter how tedious things get, Amsterdam is only a nonstop flight away from reality. (for most cities in the world I
26 Post contains links MillwallSean : Czech has received the green light to provide aid to its airline because it has proven that the aid is in line with EU law. They have then applied, ha
27 ju068 : Yes, but the main problem for Malev was its fleet (a deal signed by the current CEO of Wizz Air). The deal was totally crazy with unrealistic demands
28 KL911 : Very true, but what worries me is the timing. Normally the summer season is the moneymaker, to have a buffer for the weak winter period. I dont see t
29 gr09 : I think my post got overlooked. This is not about any new subvention that CSA/state would apply for. This is about subvention from 2009 that state had
30 Post contains links MillwallSean : I agree with you. Czech isn't in great shape. However the state aid should allow it to stabilise and get through the winter without issues. Question
31 ju068 : Well I work for the European Parliament so no need to help me, especially not when you are wrong, again. If I really wanted to do something about all
32 Post contains images KL911 : Since when is Serbia in the EU? Me too, my wife is Czech. But I also want more LCC options to PRG. Just 8 Wizzair and 6 Easyjet routes doesnt do it f
33 ju068 : Serbia is not in the European Union, I have a dual citizenship. But there are posts open for non-EU people at the European Parliament, just those job
34 Post contains images Asturias : Ironically, FR is heavily government subisidised so it's only fair that real airlines get some of that as well. Not really, Iberia is based in Madrid
35 KL911 : A typical answer from you. There is a diference between state aid given ( legal or illegal) to cover losses ( as is the case now with OK, and Iberia
36 Aesma : From a 2012 pdf of the group : AIR FRANCE-KLM A French limited liability company (société anonyme) with capital of 300 219 278 euros Registered offi
37 Viscount724 : Few people think of KL as French. In fact I would guess that a high percentage of KL passengers have no idea that KL is even related to AF. The same
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