REFILE-INTERVIEW-Czech CSA airline sale could start by yr-end

                                
  (Refiles to add reference to beginning of sale in paragraph 4)
                                
 By Jana Mlcochova
                                
 PRAGUE, Aug 22 (Reuters) - Czech Airlines (CSA) could be put
up for sale as early as this year as the Czech Republic looks to
act before the market worsens, a Finance Ministry official said
on Friday.
                                
 "This may be one of the last chances to sell CSA (Ceske
Aerolinie) as the market situation could be much worse in coming
years," Tomas Uvira, head of the ministry's Asset Division, told
Reuters in an interview.
                                
 "(If everything goes according to plan,) the tender for CSA
sale could be opened by the end of the year," he said, adding
that an adviser for the privatisation should be signed up in
early September.
                                
 The government had not previously said when it might begin
the sale of its 91.5 percent stake, which analysts said may
fetch some 4 billion crowns ($244 million).
                                
 The sale by the government, which also aims to sell the
country's main airport in Prague, comes as high oil prices and
increased competition weigh on airlines around the world.
                                
 Neighbouring Poland plans to launch an initial public
offering for state-controlled airline LOT [LOT.UL] next year.
                                
 Uvira said 2008 is seen as the peak of a cycle for the
airline industry and advisers now predict a decline in sector's
profitability.
                                
 He said CSA could lose some of its most profitable routes
outside the European Union if it is sold to a foreign owner
because of strict bilateral rules which grant reciprocal
take-off and landing rights based on the nationality of
airlines' owners.
                                
 The government was likely to demand that the airline
preserve its status as a Czech carrier for perhaps three to five
years, he said.
                                
 The ownership structure used in Air France's <AIRF.PA>
takeover of KLM finalised in 2004 allowed the latter to retain
its Dutch national status.
                                
 
                                
 AIRPORT SALE
                                
 The government is also working on a system regulating fees
at the Prague Airport ahead of privatising it next year.
                                
 "The system of regulating airport fees will have a
significant impact on the airport's value," Uvira said,
declining to elaborate on how much the airport could be worth.
                                
 "One of the key points for the regulation is setting an
adequate profitability level," he said.
                                
 Finance Minister Miroslav Kalousek has said he would not
recommend selling the state's 100 percent stake for less than
100 billion Czech crowns ($6.11 billion).
                                
 The ministry has not yet disclosed details of the fee
system, but Uvira said investors will probably want to collect
the fees in euros or ask for other ways to limit the impact of
exchange rate volatility.
                                
 (Reporting by Jana Mlcochova; Editing by Jason Neely)