A centuries-old tradition full of ups and downs is coming to an end. ČSA joined Smartwings – Seznam Správy

Czech Airlines (ČSA) will carry its last passengers on Saturday and then disappear as an independent company after 101 years. It is merging with another Czech airline, Smartwings, creating a completely new takeover. ČSA will therefore cease to operate its own independent flights, and Smartwings will take over the operation completely.

Behind this “change in the business model”, as ČSA presents the whole situation, to a large extent are the financial problems that Czech Airlines has been experiencing for the past two decades .

“There is always a need to increase the costs of operating companies within the group and simplify processes. At the same time, we will be able to offer consumers a consistent, clear and understandable offer of products and services on all our flights,” said Jiří Jurán, Chairman of the Board of Directors of Smartwings.

However, apart from the fact that the iconic check-in code “OK”, used by Czech Airlines for a century, will disappear from the departure boards, passengers will not recognize any difference. “Nothing is changing for CSA customers. The ČSA logo and flights to all current destinations remain unchanged. Customers can continue to buy tickets on the ČSA and Smartwings websites, as well as through existing distribution channels,” the company said in a press release.

It might even happen that passengers fly on the original red and white ČSA plane. Smartwings will add these aircraft to its fleet. In particular, these are two Airbus A320 aircraft and four Airbus A220-300 machines that were recently purchased, the first two of which are to be delivered at the end of this year and the other two in the first half of 2025. The logo is just being repainted. .

The beginning of the end of the airline came with the privatization of the company after the revolution. At that time, due to the lack of subsidy from the state coffers, there had to be a major restructuring and layoffs. The appointment of Jaroslav Tvrdík to the head of the board in 2003 brought fundamental and, according to some, largely negative changes in the management of the company.

Tvrdík’s expansion strategy – a major expansion of the fleet and a significant increase in employee salaries – led the company to a significant increase in operating costs. In addition, the company committed itself to large investments, the result of which was not true in the situation at the time. At the same time, financial losses began to accumulate, which gradually weakened the stability of ČSA, leading to a total loss of 3.76 billion crowns in 2009 – this is a much worse result than in the covid years.

The management started to solve the almost hopeless situation by selling ČSA assets, including the company’s headquarters, the warehouse in Ruzyne, the Ruzyne hangars and a room – sleep of the workers. Even the Korean company Korean Air failed to save the failed company. At that time, she bought 44 percent of the shares in ČSA. Part of the strategy was to strengthen the position on the Asian market.

However, in 2017, the share of the Koreans was bought by Smartwings (then Travel Service). However, they owned 34 percent of the company at that time. Together with the payment of Koren Air, Smartwings bought the state’s share, which was less than 20 percent. Smartwings thus became almost the full owner with a share of 98 percent. The remaining two hundred were then owned by Česká pojišťovna (today’s Generali).

The covid-19 pandemic was a problem not only for ČSA, but also for other airlines. The number of passengers carried dropped by up to 70 percent.

“If it were not for the covid-19 pandemic, ČSA would have had the latest aircraft of the new generation in its fleet from 2020, and the company’s strategy included the development of destinations and a network of routes, including high-speed ones. . Instead, the for-profit company began to fight for survival. ČSA had to implement painful but unavoidable austerity measures to ensure long-term sustainability,” explained a Smartwings spokesperson at the time.

From the original size of the air fleet, which was between 20 and 40 aircraft from the beginning of the millennium and even 75 aircraft in 1965, today only two aircraft remain. Along with the factors mentioned above, the rise of low cost airlines such as Wizz Air and Ryanair also worked.