Czech cabinet moves ahead with airport, CSA sale

...and then sell or lease it, Prime Minister Mirek Topolanek said.

The cabinet also vowed to go ahead with preparations for the eventual sale of Czech Airlines (CSA), following the completion of a restructuring programme at the company.

The centre-right government has been looking for privatisation revenues, mainly in order to finance road construction.

Topolanek gave no details but Transport Ministry spokesman Karel Hanzelka said the Prague Airport plan calls for its assets to be shifted into a newly created joint stock company and by March the ministry will propose how to proceed.

"We will propose what to do with the joint stock company, if there should be a long-term lease, or privatisation," he said, adding a stock market float was also an option.

Whatever path is chosen, the process should be completed next year, Hanzelka said.

The airport had 11.6 million passengers last year and made a net profit of 972 million crowns ($49 million) on revenue of 5 billion crowns.

The government also agreed to move on towards the eventual privatisation of CSA, but only after key steps are taken in a rationalisation programme for the airline which has suffered losses after a rapid expansion in its fleet and services in recent years.

CSA, a member of the Sky Team alliance which also includes Air France-KLM and Delta Air Lines and Alitalia , expects a small profit this year after a 397 million crown loss last year.

The airline, with a fleet of 50 mostly mid-range planes, has sold off some assets and cut costs under the 2006-2008 restructuring plan.