PRAGUE, Dec 15 (Reuters) - The Czech Republic will sell Czech Airlines (CSA) in a two-round tender next year, the finance ministry said on Monday, pushing ahead with the state carrier's sale despite worsening global economic conditions.
In a statement, the ministry also said a consortium of Deloitte Advisory and CMS Cameron McKenna would act as privatisation advisors.
The government plans to sell its 91.5 percent stake in the airline by the end of 2009, said a ministry spokesman Ondrej Jakob.
The privatisation's timeline has slipped from a planned sale in the first half of 2009, slowed by a two-month delay in choosing the advisor.
Record high oil prices over the summer and the ongoing financial crisis have put a drag on travel demand, pushing airlines to cut capacity and prompting expectations of a wave of consolidation in the airline industry.
Analysts have estimated CSA, which swung to a small profit in 2007 and expects to break even this year, could fetch around 4 billion crowns ($207.3 million).
Bidders in the first tender round would need to address conditions such as keeping CSA's status as a national or European carrier and maintaining Prague Airport as the airline's home base, while price would be the main criteria in the final round, the ministry said.
Russia's Aeroflot, CSA's fellow member in the SkyTeam alliance, is the only airline that has shown public interest in the Czech airline so far.
Industry body IATA has estimated airlines are set to post losses of more than $5 billion this year, although CSA's chief executive told Reuters last month the airline was in a better position to withstand the global slowdown compared to rivals.
CSA posted a 124 percent rise to $22.05 million in pretax profit in the first nine months this year, with passenger traffic climbing 4.9 percent to 4.4 million.
The airlines' 50-aircraft fleet flies to most European capitals. ($1=19.30 Czech Crown)

Russia's Aeroflot to bid for Czech Airlines - paper -2

MOSCOW, January 19 (RIA Novosti) - Russia's largest air carrier Aeroflot will file a bid for the purchase of the Czech national air company, Czech Airlines (CSA), a business paper reported on Monday.

The Czech Finance Ministry will announce on Monday the terms of the tender for the privatization of a 92% stake in CSA, which performs flights to 104 destinations in 44 countries, Vedomosti reported, citing the ministry.

Aeroflot's deputy general director, Mikhail Poluboyarinov, told Vedomosti that the company planned to file an application for the tender, but declined to say how much the Russian flagship air carrier was prepared to pay.

Meanwhile, the Czech Finance Ministry said that it had received inquires about the terms of the tender from more than 10 companies, the paper said.

An Aeroflot spokesman said that the Russian air carrier would seek loans to pay for the deal, but would file a bid jointly with a financial partner to share payments.

Yelena Sakhnova, an analyst with VTB Capital, told Vedomosti that the whole of CSA could cost about $800 million (more than $735 million for 92%). However, this amount should be reduced by the sum of the company's debt, which CSA has not disclosed.

At the same time, Yevgeny Shago, head of the analysis department at Ingosstrakh-Investment management company, told Vedomosti that CSA could be worth no more than $400 million.

Meanwhile, Oleg Panteleyev, editor-in-chief of Aviaport.ru, told Vedomosti that CSA is the best of all the assets in which Aeroflot has ever displayed an interest, as the Czech air company has low debts and good positions in Eastern Europe.

However, the purchase of a European air company is not as advantageous as a year ago, as air carriages are declining in Europe while competition is increasing. Over the year, passenger traffic in Europe rose 2.2% but fell 1.3-4.6% in October-November, according to the International Air Transport Association, the paper said.

However, the National Reserve Corporation, which holds 28% of Aeroflot shares, said on Monday it did not support the company's plans to buy a 92% stake in Czech Airlines.

"It has been reported that Aeroflot will finance the deal with credit resources and, on top of that, with the support of some mysterious co-investor. We believe that in the current difficult conditions it is unreasonable to burden the air company with new debts," said Alexander Lebedev, chairman of the National Reserve Corporation board of directors.

If Aeroflot needs an air carrier in Europe, the National Reserve Corporation is ready to offer Germany's Blue Wings, in which it holds a stake, Lebedev said.