Aeroflot excluded from CSA sell-off that could net Czech state rather less than originally hoped
The Czech government said on Monday that Aeroflot would not be allowed to bid for its stake in the Czech national carrier, CSA. However, the exclusion of the Russian airline and another company means only two bidders will now take part in one of the last big Czech privatisations. That could well mean that the sale of Czech Airlines raises rather less than originally hoped.
No reasons were given for the exclusion of Aeroflot and a US-Turkish investment company. However, in the case of the former the Czech government may have heeded the Chamber of Deputies security committee, which last week described Aeroflot, majority owned by the Russian state, as the riskiest of the four bidders.
Air France-KLM and the Czech consortium now have two months to offer concrete sums for Czech Airlines. Then the government should announce a winner in September, based simply on which of the two promises to pay the most. However, if neither bid reaches the minimum the government has in mind, the privatisation could be abandoned.
But one thing seems clear: the fact that there are only two potential buyers in the running means we cannot expect much of a “price war” as far as CSA is concerned. The sell-off of the company, which was founded in 1923, is likely to bring rather less into Czech state coffers than the country’s leaders originally envisaged.
