* Aeroflot <AFLT.MM> enters tender to buy CSA
* Czech FinMin to announce preliminary bids later on Monday
(Adds background)
PRAGUE, March 23 (Reuters) - Russia's Aeroflot <AFLT.MM>
said on Monday it had entered a tender to buy state-owned
carrier Czech Airlines (CSA), a small European airline hit by
leasing costs as well as the economic downturn.
The Czech government is selling a 91.5 percent stake in the
airline as a global economic slowdown has sapped travel demand,
putting airlines under heavy pressure. []
[]
The finance ministry closed the first round of the sale
tender on Monday with bidders asked to file documentation by
midday, and said it would release a statement later.
Earlier, Air France-KLM <AIRF.PA> said it would file a
letter of interest in order to access the airline's data, and
Czech media reported a consortium of Czech companies Travel
Service <ICEAIR.IC> and Unimex Group had also bid.
The Czech finance ministry has said it hoped to pick a
winner by the end of September. Analyst expect the deal to fetch
up to 5 billion Czech crowns ($255 million).
Bidders need to meet conditions such as keeping CSA's status
as a national or European carrier to prevent the airline losing
some of its most profitable routes outside the European Union.
That could happen if the company is sold to a foreign buyer
because of bilateral rules that grant reciprocal take-off and
lending rights based on the nationality of airlines owners.
Non-Czech bidders will therefore have to combine with Czech
entities in consortia to fulfil that condition.
Aeroflot said it planned to create a partnership with a
Czech or a European company but did not specify which.
The government will also assess bidders' security risks with
politicians having voiced concerns Aeroflot may not be an ideal
buyer for the Czech carrier from the security point of view as
the Russian carrier's ownership structure was unclear. Aeroflot
has not commented on the matter.
Aeroflot has long been on the lookout for acquisitions in
Europe, but over recent years has pulled back from plans to buy
stakes in European carriers such as Austrian Airlines <AUAV.VI>,
Serbia's JAT Airways and Alitalia <AZPIa.MI>.
Aeroflot chief executive Valery Okulov, son-in-law of
Russia's first president, Boris Yeltsin, told Reuters in
September the company was eyeing two acquisitions including
Czech Airlines.
Air France, which sees itself as a major player in European
airline consolidation, said Czech Airlines' flight network was
highly complementary to its own and would enable it to
strengthen its position in central and eastern Europe.
Air France described Czech Airlines as a close partner,
particularly through its membership of the global SkyTeam
Alliance of airlines since 2001.
National airlines in central and eastern Europe face
pressure to give up their independence or go bust as the global
economic crisis hits demand and competition intensifies.
CSA made a 2008 pretax profit of $550,000 million on
operating revenues of 23.2 million Czech crowns. Its management
has cut costs and boosted revenue in recent years by divesting
non-core assets, such as a catering divisions, and by selling
and leasing back planes.
(Reporting by Jana Mlcochova; Editing by Dan Lalor)
($1 = 19.64 Czech crowns)
