CSA Czech Airlines will lay off a third of its staff, including pilots, as part of an emergency restructuring hastened by a drop in demand exacerbated by the stand-off between Ukraine and Russia, the company said.

The latest layoffs follow a decision to hasten the grounding of six Airbus A320s out of a fleet of 23 aircraft, starting this winter. CSA said the plan had been drawn up earlier and approved by shareholders this month.

CSA will lay off 280 staff, including 70 pilots, from its 900-strong workforce. The cuts will also include flight attendants and office workers.

CSA Czech Airlines To Lay Off A Third Of Staff
http://news.airwise.com/story/view/1411559584.html

=


Maybe its time to lose another former small state airline.

I suppose with new partial owners like Korean Air involved, the company must be much more focused on financial metrics than before.

Lets see what routes they withdraw with the fleet pull down..

Lets be honest, what does OK really bring to the plate?

Like Hungary, small Czech nation can be easily served by other airlines. Between larger carriers like LH/TK/OS/AF/LX plus the LCCs like Easyjet, Wizz, German Wings, etc there is lots of options at PRG.

Quoting mercure1 (Reply 1): Like Hungary, small Czech nation can be easily served by other airlines. Between larger carriers like LH/TK/OS/AF/LX plus the LCCs like Easyjet, Wizz, German Wings, etc there is lots of options at PRG.

I don't know about the small Hungarian and Czech nations, but the small Slovak nation is served by the above mentioned combo of carriers very poorly. If OK would disappear, it would become even worse and I'm sure that the Czechs would feel it too. Czech republic isn't only Prague.

Quoting WildcatYXU (Reply 2): I don't know about the small Hungarian and Czech nations, but the small Slovak nation is served by the above mentioned combo of carriers very poorly

Its not like the capital BTS is a very huge airline market. Also they have access to the world via VIE mere 50kms away.

Not sure why this matters for CSA. They virtually offer no service to Slovakia these days. Only 3-4 ATR feeder flights per day.

Well, not that I would say they are really needed. As PRG is in the meantime well covered by a wide variety of carriers (as mentioned above + EK + KE+++) and BTS...well, it's actually only the low cost airport of VIE. And then there remains more or less only KSC which is indeed has not more to offer then CSA...but well, WIZZ might fill this gap.

Quoting mercure1 (Reply 3): Not sure why this matters for CSA. They virtually offer no service to Slovakia these days. Only 3-4 ATR feeder flights per day.

Again, Slovakia is not limited to BTS. The 3 ATR flights only per day are flights to KSC and are 60% of the region's connection with the world. These flights definitely do matter for the region - not for OK. But then, if these would go away, perhaps OS would add some more flights to KSC. The current ones are awfully timed.

CSA is not going to worry about a 3 ATR flight market when it has much bigger problems.
If KSC losses CSA, that's life. Industry goes on, if other airlines see it as an opportunity I'm sure they will enter it.

I think the bigger question is does a small national airline like CSA from a small country have a place in a crowded European aviation market?

Has any one any idea how the OK/KE cooperation is moving?
Are they actually handling a significant amount of passengers from eastern Europe to Far East?
I thought that was the whole idea of this cooperation and all those PRG-ICN flights....

Quoting mercure1 (Reply 1): Like Hungary, small Czech nation can be easily served by other airlines.

Are you likewise ready to argue that Belgium and Switzerland, both with smaller populations and land area than the Czech Republic alone, should be served solely by foreign carriers?

Quoting MIflyer12 (Reply 8): Are you likewise ready to argue that Belgium and Switzerland, both with smaller populations and land area than the Czech Republic alone, should be served solely by foreign carriers?

It's not necessary that the should, but they could also, most probably.
Nobody says that OK should be vanished, but it it happens...well, I doubt that this will mean the end of the Czech Republic.
And regarding Belgium...I believe they are half way there to remain with only foreign carrier, if not soon something changes.

Probably worth mentioning Travelservice and their Smartwings brand. CSA aren't the only major Czech airline

Quoting MIflyer12 (Reply 8): Are you likewise ready to argue that Belgium and Switzerland, both with smaller populations and land area than the Czech Republic alone, should be served solely by foreign carriers?

Both Belgium and Switzerland are many times larger aviation markets than small Hungary or Czech republic.

But yes in theory, I think idea of small national airlines are from yesterday. Maybe Belgium in particular might lose SN eventually as its still loss making under LH umbrella. Other markets like Balkans region have many such small airlines hanging on at loss.

Quoting Transportatorul (Reply 7): Has any one any idea how the OK/KE cooperation is moving? Are they actually handling a significant amount of passengers from eastern Europe to Far East? I thought that was the whole idea of this cooperation and all those PRG-ICN flights....

How much could a 4x weekly KE service really do?

KE serves many cities itself directly in Europe, and its not like OK has huge feeder network either.

Quoting MIflyer12 (Reply 8): Are you likewise ready to argue that Belgium and Switzerland, both with smaller populations and land area than the Czech Republic alone, should be served solely by foreign carriers?

If economics dictate that would be logical outcome. Though as mentioned both Belgian and Swiss local markets are significantly larger than what Czech republic generates.


Lets be realistic here with CSA. When was the last time it was actually was earning money? Seems like in recent years we've seen multiple rounds of restructuring. Even the EU in its 2011 report doubted its ability to become viable.
At some point OK's latest financier KE will get also tired of subsidizing the loss making venture.

Quoting Transportatorul (Reply 7): Has any one any idea how the OK/KE cooperation is moving?

KE planned to set PRG as its European hub, but OK connections work only to a couple of destinations (because many OK networks are only 1 daily which doesn't offer convenient schedule). And with this rate, I don't think PRG is any beneficial to KE.

OK has been running PRG-ICN 3-4 times a week and initially 330 was used on some other routes (TLV, etc). However, with KE's 3-4 weekly flights, there are two flights on some days and no flights on some days. From this winter, OK's 330 will be parked mostly at ICN and offers seamless schedule with KE: see PDF file at http://info.topasweb.com/infBbs/1/ok/83/2/detail.do?selectedSn=120273 Eventually it will be like KE operates all these flights.

Quoting LAXintl (Reply 12): How much could a 4x weekly KE service really do? KE serves many cities itself directly in Europe, and its not like OK has huge feeder network either.

Well, you have 4x KE and another 4x OK on PRG-ICN, so I would say that those are some planes to fill. And I assume this is based on feeder services, as it's hard to believe that PRG can do this solely.

Quoting HeeseokKoo (Reply 13): KE planned to set PRG as its European hub, but OK connections work only to a couple of destinations (because many OK networks are only 1 daily which doesn't offer convenient schedule). And with this rate, I don't think PRG is any beneficial to KE. OK has been running PRG-ICN 3-4 times a week and initially 330 was used on some other routes (TLV, etc). However, with KE's 3-4 weekly flights, there are two flights on some days and no flights on some days. From this winter, OK's 330 will be parked mostly at ICN and offers seamless schedule with KE: see PDF file at http://info.topasweb.com/infBbs/1/ok/83/2/detail.do?selectedSn=120273 Eventually it will be like KE operates all these flights.

Thanks for the info.

Quoting mercure1 (Reply 11): But yes in theory, I think idea of small national airlines are from yesterday.

Then, if you take this to its limit, I guess Germany, France, etc. should stop worrying about EK, TK, QR, etc. on one side and FR et al. on the other slowly pushing LH and AF out of business and just embrace the new order... Why do Germany and France need a national carrier if the Czech republic doesn't? And why do the EU and the US bother with foreign-ownership restrictions for their airlines?

Quoting UALWN (Reply 16): Then, if you take this to its limit, I guess Germany, France, etc. should stop worrying about EK, TK, QR, etc. on one side and FR et al. on the other slowly pushing LH and AF out of business and just embrace the new order... Why do Germany and France need a national carrier if the Czech republic doesn't? And why do the EU and the US bother with foreign-ownership restrictions for their airlines?

Yes fully agree. Ultimately let basic economics dictate winner and losers.

Quoting mercure1 (Reply 17): Yes fully agree. Ultimately let basic economics dictate winner and losers.

Oh dear god! I loved this site when it was focused on aviation enthusiasm, then the bean counters/penny pinchers took over. As an aviation enthusiast I'm sad to see all these airlines go, and can't believe that there are people on this site actually OK with seeing such iconic names as LH or AF in the name of the "market."  

Quoting OA412 (Reply 18): Oh dear god! I loved this site when it was focused on aviation enthusiasm, then the bean counters/penny pinchers took over. As an aviation enthusiast I'm sad to see all these airlines go, and can't believe that there are people on this site actually OK with seeing such iconic names as LH or AF in the name of the "market."

You run your life based on nostalgia, or what your wallet can afford?

Might be cruel, but reality is life comes down to dollar and cents, something that cant be ignored for long in such a capital intensive industry as airlines.

So airlines come, and airlines go. Its all part of greater cycle of life so I think quite normal that one can objectively look and discuss the industry here on A.net minus any rose colored glasses.

[Edited 2014-09-24 14:17:40]

Very sad development indeed.  

Problems for CSA started when the government replaced a competent CEO (Mr. Kůla) with a village idiot Tvrdik (a political nominee, a total tool). Prior to that CSA was expanding and was a major player in the CEE market. It focused its operations and services to key European markets as well as CIS market.

Since then, political nominees continued to ruin CSA and generate accounting profits (e.g. from sale of intangible and fixed assets). Tvrdik's shift from Boeing to Airbus was illogical and it many unanswered questions remain (possibility of corruption).

I still hope that Korean will turn around CSA as its European feeder to Asia.

It is horrible, what has become of this great airline.

Quoting mercure1 (Reply 3): Its not like the capital BTS is a very huge airline market. Also they have access to the world via VIE mere 50kms away.

Lack of airlines in Slovakia deserves its own thread. Many of O/D traffic is from Slovakia as BTS/KSC are under utilized. However this is a political failure as in this country its all about securing sweet posts for friends and business partners, not to serve people/electorate.

Flights from Slovakia are full and demand is obviously present. Plus, you can not discount still close emotional connection to the Czech Republic (I would say that in Slovakia this connection is deeper than in the Czech Republic; but many older Slovaks still have a perception of CSA as 'our airline', same goes for Skoda (auto manufacturer) as 'ours').

Despite the fact that BTS serves less then 20 scheduled flights a day, demand for key destinations exists. Flights to London, Frankfurt, Brussels, Prague, Milan, Dubai (to mentioned a few) could handle multiple daily rotations (besides Dubai  ; on a turboprop airplane, where time savings of a jet are not significant).

Local airlines failed mainly due to incompetent management and bad experience from SkyEurope (based on this key local banks are forbidden to provide financing to local airlines).

Quoting mercure1 (Reply 1): Like Hungary, small Czech nation can be easily served by other airlines. Between larger carriers like LH/TK/OS/AF/LX plus the LCCs like Easyjet, Wizz, German Wings, etc there is lots of options at PRG.

What made OS significant player? They seem to focus on similar markets (Europe, CIS, ROW). Do they survive just because of Vienna (as base for many international organizations) and close cultural/economic ties to Germany? Has it not been for LH's purchase, would OS ended up in similar situation as Malev or CSA?

Cheers,

Andrej

[Edited 2014-09-24 14:59:06]

Quoting MIflyer12 (Reply 8): Are you likewise ready to argue that Belgium and Switzerland, both with smaller populations and land area than the Czech Republic alone, should be served solely by foreign carriers?

Arguably Belgium and Switzerland ARE served/hubbed by foreign carriers, with LX and SN both being controlled by LH.

Quoting LAXintl (Reply 6): I think the bigger question is does a small national airline like CSA from a small country have a place in a crowded European aviation market?

Arguably no, at least, not as a standalone carrier. That isn't to say, however, that PRG couldn't work as a hub for another, larger European carrier.

Quoting andrej (Reply 20): Problems for CSA started when the government replaced a competent CEO (Mr. Kůla) with a village idiot Tvrdik (a political nominee, a total tool).

Indeed, Tvrdik was an idiot and a clueless political apointee. Ironically the ones pushing most for Kula's fall were militant pilot unions CZALPA who felt he was too conservative.

Quoting Humberside (Reply 10): Probably worth mentioning Travelservice and their Smartwings brand. CSA aren't the only major Czech airline

They are not a scheduled airline, but a rather strange, though profit-making, hybrid of a "soft" LCC/charter airline/ACMI provider.

Quoting andrej (Reply 20): I still hope that Korean will turn around CSA

I was very hopeful when they picked KE instead of EY, among other reasons because of very positive track record of previous Korean investments in the country (LG, Doosan, Hyundai, Donghee, Nexen). So far KE has been a huge disappointment and one can only guess what their intentions with OK are.

More specifics on the cuts
77 of its 230 pilots,
152 of the 400 cabin staff
66 ground staff

Employment contract cancellations with staff will take place over two months starting December 1st.

Trade unions for crew threaten to strike over layoff plans. Company says its trying to reach a deal with either Korean Air or Aeroflot to take some pilots under contract.

Apparently this is the second round of cuts this year with 60 flight attendants and 10 ground staff let go during the spring.

http://www.channelnewsasia.com/news/...ech-airlines-stewards/1379742.html
http://rusplt.ru/world/krizis-podrezal-kryilya-13115.html

=

In 2013, the CSA has suffered a record loss of EUR 335 million.

Quoting mercure1 (Reply 17): Ultimately let basic economics dictate winner and losers.

What I meant to say is that aviation is not only ruled by pure economics. There are all sorts of other rules and regulations that only apply to this industry. For instance, the US (the paradigm of economical laissez-faire) limits foreign ownership of US airlines to 25%. That does not happen in, say, the car industry (see Chrysler). Also, the US doesn't allow foreign airlines to operate in the domestic US market. That doesn't happen in, say, the banking industry (see HSBC), or in the oil industry (see BP). I think we would all agree that cars, finance and oil are pretty strategic sectors, and yet they are completely liberalized. Air traffic, however, is not fully liberalized. It follows that air traffic must be of even more strategical value than oil or finance. Hence the interest in keeping a national airline in the US, in France, in Germany or in the Czech republic.

Quoting mercure1 (Reply 23): In 2013, the CSA has suffered a record loss of EUR 335 million.

  Yikes.

Almost a million Euros a day for a small operation

I just realized looking at their fleet, they only have 6 A320s.

So after removing them they will be left with 7 ATRs, 9 A319s, and single A330.

Quoting L410Turbolet (Reply 22): Quoting Humberside (Reply 10): Probably worth mentioning Travelservice and their Smartwings brand. CSA aren't the only major Czech airline They are not a scheduled airline, but a rather strange, though profit-making, hybrid of a "soft" LCC/charter airline/ACMI provider.

The Smartwings operation is scheduled (and codeshares with CSA)

For a long time I wanted to convince myself that things will be all right, but OK is shrinking bit by bit and Korean's entry into OK is welcomed, but many had hoped something "more" would happen other than giving CSA an A333 and having them fly to Seoul ICN 4x a week.

Agreed that the government played a major role in destroying a once operational airline with potential. They milked it and and had political posts come and go into the airlines' offices and OK simply "snoozed" and it is quite hard to build a growing airlines with less and less planes. Sadly the airline is called an "aero-klub" in Czech...

The one who should be placed on a runway while any aircraft is on approach and landing is definitely Jaroslav Tvrdik (apologies for any insinuation of aggression .. I do seek world peace for sure). He is the perfect and unblemished example of a sleazy politician who jumps int bed with anyone for political gain and profit.

“He knows nothing; and he thinks he knows everything. That points clearly to a political career.”
― George Bernard Shaw

The problem that during his reign he simply ordered too many Airbus planes, while he should have gone "smaller". But he bought A320/319s and then started to think "where should we fly" and then came the "era" of OK opening a route and then subsequently closing it with "unimaginative" airline "spokesmen-women" stating nonsensical facts and excuses.

Prague in itself is not a bad destination and CSA lost its foothold in its home base. Joining CSA and the "Czech Aeroholding" was a desperate but calculated move. A money bleeding airline that could and most probably "expected" to die was joined with a very healthy and profit making airport. All flight services were "taken" apart and created independently as Czech Technics, Czech support and handling, Catering etc... having OK to concentrate only on its core business. I do admit that I had optimistic hopes since that "merging" with the airport happened and the subsequent interest from Korean Air, but I am beginning to realize that my expectations are on shaky grounds.

Czech Aeroholding openly said that they are actively reducing the size of OK gradually. Call it optimization... call it streamlining... I think it is all semantics. They admitted that that a sudden "fall" of CSA would affect Prague airport painfully as did Malev in connection to Budapest airport, thus the slow re-sizing of the Czech carrier and at the same time filling the void right away with other carrier would at least keep PRG performing well, with profit and without any sudden drop of passengers' numbers. Perhaps a rational move but one without "balls", "guts" and simply avoiding a fight for the local market.

One of the things that had me "fall off my chair" and with 80% anger / 20% indignation is that Tvrdik still survives in the political background and a brainless twat quoted him in the newspapers as the head of some Czech-Chinese investment group on his opinion as an aviation "expert" on the planning of opening a direct Prague-China route proposed for 2015.

Czech airlines just had it's 90th birthday and there are questions whether we will see a 100th birthday. I guess the airline as such will not "disappear" and will be a simple, small sized European carrier that serves its local home base with a less market/passenger share. I have read some research and stating that Korean Air's cooperation would show results only as of 2015 onward. I am not certain what "benefits" will be seen other than OK serving KE's needs for the well used PRG-ICN route mainly due to the huge and growing investments in the Czech Republic. I would argue that OK would not be such a glaring partner for KE's transfer passengers if they keep on cutting routes. But I am not an expert and can only watch and see once more data and news comes by.

Many may not know about Travel Service's connection to Czech Airlines at the moment as a shareholder. An airline that started from scratch as a holidays and charter operator and partially low cost carrier (Smartwings). Today it has 25+ planes (larger than OK) of B737-800s and flies to many destinations in Europe, the near east as well as the Mediterranean. I think OK will somehow fade into that airline and become a European carrier with destinations to the main European capitals and as well holiday destinations. Korean is a very "quiet" company and their plans are always unclear.

I just wish they would get their act together and have a decent "company aim" instead of "leasing" the planes that they are unable to fill. Concentrating on Russian destinations and other "post soviet countries" was lucrative due to the high ticket prices but his "greed" has them today in a bad corner as OK's "eggs" were mainly in that basket. Many warned on the rather uncertain political direction of Russia and I guess I don't need to explain further! During this time CSA lost its rather good and old tradition for flights to the near East and North Africa, the UK, etc...

The layoffs as much as it saddens me to say are needed to suit the size of the diminishing airline. They're losing true professionals as OK's pilots and crew are truly one of the best out there. I am still hopeful that there will be a turnaround and even if it won't be an airline with 50+ planes, we would still see "OK's" livery flying into better days...

For those who mentioned Vienna. As much as Prague is compare to VIE as being in the same "region", for people in Bohemia (Western and Central Czech rep.) it is not an option. It would be thinkable for those who live in Moravia (East and South East of the Czech Rep) as Vienna is located South and much Eastern than Prague itself. The "travel" time from PRG to VIE by land is just too long whether it is by train or highway.

I have tried as many Czechs from Prague to fly through Munich as the highway is direct even if it takes around 3 hours, but I can see that its mainly an option if you choose to fly westwards to the US, Canada and South America. Lufthansa is very active in this role as is AF/KLM. The "east" direction is served by Emirates and Aeroflot (from personal experience with best prices and rates). But again adding the travel time to MUC on land is as well a negative thing.

Slovakia in general is moot. Bratislava is minutes away from Vienna so a 30min drive and you can fly anywhere you like. As much as OK would like to get some of that business (from KSC too), it's never going to be interesting to fly with a stop in PRG if you have a non stop option.

Prague as I can see are trying to have itself as somewhat a less "congested" gateway for Asian travel. The current reality is very modest with Korean 4x weekly and CSA ICN 4x weekly and the awaited "probably" China Eastern from Shanghai. Even if playing a second fiddle, OK should be trying its best to have itself as reliable and no hassle feeder with a chance to stay above water and have ample time to think of its strategy of growth.

[Edited 2014-09-26 12:07:47]