State mulls Smartwings purchase but firm’s importance questioned

Photo: Anton Kaimakov

The state could buy the Czech airline Smartwings, the minister of industry and trade revealed at the weekend. However, the suggestion has raised eyebrows, with critics questioning whether the carrier is in fact a strategic enterprise.

Photo: Anton Kaimakov
On Saturday, the minister of industry and trade, Karel Havlíček, said the state was considering acquiring a 100-percent stake in Smartwings, a low-cost airline that owns 98% of Czech Airlines.

Mr. Havlíček said the cabinet would decide on the matter by the end of June, adding that such a purchase would be an investment that could pay off in future.

The ANO minister said that Smartwings was of strategic importance for the state, in part because it was a key carrier for Czech citizens and companies.

Mr. Havlíček said that rescuing the indebted company would cost the state billions of crowns.

The minister of finance, Alena Schillerová (also of ANO), had earlier said that the only move that would make sense was for the state to take a 100-percent stake in the firm.

However, Ms. Schillerová said this was not yet on the table and an economic analysis needed to be carried out.

The opposition were quick to dismiss the proposal. Miroslav Kalousek of TOP 09 said there was no reason the state should become more involved in Smartwings than other companies.

The head of the Mayors and Independents, Vít Rakušan, described the plan as total nonsense, while Civic Democrats boss Petr Fiala also criticised it.

The Pirate Party’s Jan Lipanský said the suggestion Czech Airlines was a good calling card for the Czech Republic was unfounded. In fact, the carrier is regarded as well below average internationally, he said.

Mr. Lipanský also drew attention to the fact a co-owner of Smartwings, Jiří Šimáně, is a friend of Prime Minister Andrej Babiš, raising the danger of a conflict of interest.

For his part, the ANO leader has said he doesn’t want to be closely involved in the matter for precisely this reason.

On Sunday Mr. Babiš said he was unaware of the precise details of the proposed purchase, though he did say the state could take over the company for a symbolic CZK 1.

Mr. Babiš said travel agents had been calling on the government to help Smartwings.

For his part the head of the Social Democrats, Jan Hamáček, said the question of the state buying the firm was not on the table.

The leader of the junior government party said Smartwings ought to make use of the mechanisms already in place to help struggling companies.

The head of the Christian Democrats, Marian Jurečka, said that the state had offloaded its final stake in the company while Mr. Babiš himself was finance minister.

Mr. Jurečka said this meant the strategic importance argument didn’t’ fly, adding that he saw no reason for the state to buy a private airline now. Last year the Smartwings Group handled 8.2 million passengers.