Korean Air finalised its 44 percent investment in CSA (Ceske Aerolinie AS), the Czech government owned flag carrier on April 11, 2013 for a nominal price of 2.64 million euros ($US3.4m). The government said: “We only had two options: either find a strategic partner or consider liquidation of CSA”. Korean was the only bidder for the carrier, although Qatar expressed an interest.
If the European Commission loosens regulations on foreign ownership of EU carriers then Korean Air will have first option to buy the remaining 56% stake held by the government owned holding company. If this occurs in the next twelve months, then the price would be based on the current bid. After the year, the asking price would be calculated by an an independent adviser.
Korean have pledged to hold their stake in CSA for five years, according to the terms of this week’s sale. In return, CSA won’t make “significant” changes in its strategy. Korean Air have also publicly stated they are not interested in managing the Czech carrier. Korean Air is likely to use its new investment as a feeder airline for its Asian flights making the Czech capital Prague one of its European transfer cities. Korean are also moving their European call centre to Prague.
The European airline has been running since 1923 and has 26 planes flying 59 routes. It was one of the first airlines to fly jet planes back in 1957. It is currently rated a three star airline by Skytrax. Korean, has a fleet of 152 aircraft and operates flights to 130 destinations in 45 countries including 11 European cities. This of course, includes Prague. It is a four star airline according to Skytrax. Both the airlines are members of Skyteam, along with US Carrier Delta and Air France-KLM. I have flown with Korean and rate them at eight out of ten overall. My brother has flown CSA and though they were okay.
Korean may have luck with CSA. The integration into the Korean network should prove a fillip to the smaller carrier. What the picture will look like in 2018 will be interesting.