Czech Airlines to divest catering, cargo terminal

PRAGUE, Oct 2 (Reuters) - Czech Airlines has launched the sale of its catering operation and cargo terminal as part of its strategy of focusing on core business and returning to profits, the country's flagship carrier said on Monday.

Czech Airlines (Ceske Aerolinie, CSA), a member of the SkyTeam alliance, lost 773 million crowns ($34.57 million) in the first half of this year on rising fuel prices and competition.

The company said it wanted to ask potential investors to submit indicative bids by the year-end and pick winners of both tender sales in February 2007.

"The fundamental criterion for a decision on the sale will be price and an optimal agreement on ensuring cooperation and services for Czech Airlines," CSA President Radomir Lasak said in a statement.

Investment firm CA IB Corporate Finance is advising CSA on the sale.

The Czech government has been considering boosting the equity at the loss-making national carrier in order to save it and prepare for possible privatisation.

((Reporting by Marek Petrus

Editing by Louise Ireland

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($1=22.36 Czech Crown)

Keywords: AIRLINES CZECH