* Air France-KLM no longer bidding for CSA
* Czech finance ministry says sale will continue
* Final bidder has until Sept. 30 to submit offer
(Adds dateline PRAGUE, Czech comment, background)
By Jason Hovet and James Regan
PRAGUE/PARIS, Aug 19 (Reuters) - The Czech Republic said on
Wednesday it would continue with the sale of state-owned Czech
Airlines (CSA) with only a single bidder after Air France-KLM
<AIRF.PA> withdrew from the process.
A consortium of Czech companies Unimex and Travel Service
<ICEAIR.IC> remains in the tender, one of the biggest
privatisations expected in central and eastern Europe this year.
Air France-KLM <AIRF.PA>, Europe's biggest carrier, said it
had withdrawn from the tender process due to the impact of the
economic environment on the airline industry.
"The (Czech) finance ministry has received Air France-KLM's
decision... (and) will continue in the tender and is not
changing its proceedings," the ministry said in a statement.
It also extended the deadline for the consortium's bid by 15
days until Sept. 30, after which it will submit the sale
decision to the caretaker government, just weeks before an
October election.
Analysts have said the sale fetch up to 5 billion Czech
crowns ($275.3 million) for the state, which is tackling a
ballooning government deficit that is expected to rise above 5
percent of gross domestic product this year.
But the withdrawal of Air France could hit the price.
"The departure of one of the bidders brings the competition
level to zero, so the potential income may decrease because
there is no counterweight left," said Milan Vanicek, analyst
from Czech brokerage Atlantik FT.
CSA has seen its passenger numbers fall by about 10 percent
in the first half of the year as the economic downturn cuts into
air travel. Its first-quarter loss widened to $51 million from
$44 million the year before.
Air France-KLM said economic circumstances meant CSA could
focus instead on trying to restore its profitability on its own
through a recovery plan.
"In this context, Air France-KLM wishes to further
strengthen the existing partnership between the two groups and
to continue to explore with CSA any new areas of cooperation
that could be of mutual benefit to each company," it said in a
statement.
In April, the Czech Finance Ministry picked Air France-KLM
and the Czech consortium as second-round bidders for CSA,
rejecting bids from Russia's Aeroflot and Odien. []
Air France-KLM has been a key player in the much-anticipated
consolidation of the European airline industry, as carriers
struggle with increasing competition, rising fuel costs and a
drop in air travel caused by the financial crisis.
($1=18.16 Czech Crown)
(Editing by Karen Foster)
