The company’s debts amount to 1.8 billion crowns, and it will be clearer about the future in June after the creditors’ meeting.
The Municipal Court in Prague declared the bankruptcy of Czech Airlines. It happened at their own suggestion. The fate of one of the world‘s oldest airlines will be decided by a court, insolvency administrators and creditors. The court appointed the company Inskol z Karviné as the insolvency administrator.
This follows from the information published today in insolvency register. The company’s creditors are to file their claims as soon as possible, and the court convened a meeting of creditors in June. The insolvency administrator is now awaiting a decision as to whether the airlines should continue to operate or sell their assets.
Self-judge Petr Pacholík applied for the assignment of an administrator with a so-called special permit, the president of the court granted him. “According to the filed insolvency petition, the debtor is a major air carrier with a rich history, with revenues in 2016–2019 approaching CZK 10 billion per year, CZK 1.690 billion in 2020 and currently with more than 500 employees. ” Pacholík explained his request.
According to the insolvency petition, the debtor has approximately 266 creditors, mainly from among suppliers, and approximately 230,000 creditors from passengers, mainly due to flights not operated in the past. It owes suppliers about 800 million crowns, and passengers owed one billion crowns.
After the elimination of the ATR, three aircraft remained
The operation of the airlines continues for the time being. “Everything runs according to the law, I will get acquainted with the state of property and the whole society and I will continue to make decisions accordingly,“Said insolvency administrator Michael Ševčík from Inskol. The procedure after detail of bankruptcy is detailed described on the website of the Ministry of Justice.
The CSA management itself filed for insolvency against the company due to the state of the company’s finances. He proposed a solution to the situation of reorganizations. According to CSA’s management, liquidating the company in the form of bankruptcy is not the solution, so they are proposing a reorganization. Even then, creditors are not sure that they will get their money back. “In the event of bankruptcy, there would probably be both a permanent disappearance of the CSA brand and a lower satisfaction of the debtor’s creditors than in the case of maintaining its operation for the period of reorganization and the related generation of sales, “ stated by CSA in the proposal.
The company repeatedly pointed out in the proposal that, unlike other European countries, the carrier did not receive any state aid. “Communication with the representatives of the Government of the Czech Republic does not indicate that effective public support should be provided in the near future, which would enable the debtor to satisfy the claims of his creditors and avert the bankruptcy situation,“Stated in the document.
The reorganization plan was not published, only the proposal talks about its parts. “The debtor has prepared several variants depending on the development of the coronavirus epidemic in Europe, however, it already seems to be a significant preservation of the lines Prague – Paris, Prague – Amsterdam, Prague – Moscow and Prague – Kiev. The borrower is ready to flexibly adjust specific lines in order to maximize profits,“States CSA in the proposal.
Czech Airlines decommissioned last week all turboprop aircraft. There were about three planes left in the fleet.