Korean Air buys 44% stake in Czech Airline

Korean Air Chairman and CEO Cho Yang-ho, left, poses with Czech Premier Petr Necas after they signed a contract to transfer a 44 percent stake in Czech Airlines (CSA) to Korean Air, in Prague, Wednesday, local time. / Yonhap

By Kim Tae-jong

Korean Air, the nation’s largest flagship carrier, announced Thursday it has finalized a deal to buy a 44 percent stake of troubled Czech Airlines (CSA).

It is the first time a Korean carrier has bought a large portion of a foreign carrier, although local carriers have actively formed partnerships with foreign firms to expand their routes to foreign cities. Korean Air, the nation’s largest flagship carrier, announced Thursday it has finalized a deal to buy a 44 percent stake of troubled Czech Airlines (CSA).

Korean Air said the purchase was intended to strengthen its presence in the Eastern European market, which is growing rapidly.The deal makes the Korean carrier the second-largest shareholder in the state-run carrier following Czech Aeroholding, which holds a 51.7 percent stake.

“We are expecting to create a synergy effect through the partnership with Czech Aeroholding, which has a long business experience in the Europe and Asian markets,” Korean Air Chairman and CEO Cho Yang-ho said during a signing ceremony in Prague, Wednesday local time. “The deal will help boost the business of the two carriers and also cooperation between the two countries.”

The carrier said the deal will help enhance convenience for travelers, as the two firms will together expand and operate routes to five more cities in Europe including Munich, Paris and Rome.With the share purchase complete, the carrier will be able to expand its presence in Europe and globally more actively, he said.

Korean Air, which operates a fleet of 155 aircrafts flying to 45 countries, paid 2.64 million euros (3.8 billion won) for the stake.

Czech Airlines, which celebrates its 90th anniversary this year, is a major carrier in Eastern Europe and a member of Sky Team, the global alliance consisting of 19 top airlines. Its 23 aircraft fly to 40 cities in 23 countries.

Korean Air was the only bidder, however, for the money-losing air carrier put up for sale by the Czech state, which approved the deal in March.

The signing ceremony was joined by Korean Air President and COO Chi Chang-hoon, Czech Premier Petr Necas and Czech Aeroholding Chairman Miroslav Dvorak.