Czechs Pick Air France-KLM, Local Consortium To Bid For State-Owned Carrier

The Czech government has selected Air France-KLM and a consortium of local companies to progress to the second round of bidding for the state-owned carrier CSA and rejected two other bidders, Russian airline Aeroflot and Odien, a private equity company.

Like Air France-KLM, CSA is a member of the fast-consolidating SkyTeam alliance, to which it has belonged since 2001. A statement from Air France-KLM said of CSA, "Its network is highly complementary to that of Air France-KLM, and would notably enable the group to strengthen its position in Central and Eastern Europe."

The other bidder through to the second round is a joint venture between Unimex and Travel Service. Unimex is one of the largest private companies in the Czech Republic, with interests in hotels and tourism as well as housing and industry. It holds a stake in Travel Service, which is an aviation group that includes a small low-cost carrier plus leisure and business jet charter divisions.

The Czech government owns 91.5 percent of CSA, which has been valued by analysts at between $144 million and $240 million. The government said it intends to choose a buyer by the end of September.

CSA generally is rated as the best airline in the former Eastern Bloc. No reasons have been given for barring Aeroflot and Odien from the second round of bidding, but sources said the Czech government is wary of Russian investors, especially in such strategic businesses as aviation.