A representative of the Smartwings Group, which owns Czech Airlines, says its collapse could threaten up to 60,000 jobs.
Firm ombudsman Vojtěch Lažanský said an analysis he had produced also indicated commercial flying schools in the Czech Republic could be forced out of business if the indebted company went bust.
Government members have spoken about the possibility of the state buying out Smartwings or providing it with some other form of support.
However, opposition politicians and some analysts have criticized the idea, saying it is not a strategic company.
Last week, the Czech Republic’s Industry Minister Karel Havlicek suggested that one way in which the country could help the airline is by entering its ownership structure “up to 100%”.
Finance Minister Alena Schillerova then backed this proposal. Smartwings and Czech Airlines employ 2,500 people in the Czech Republic and have been deemed an organization of strategic importance by their country’s government.
Smartwings has rejected the government’s proposal unequivocally, suggesting that it is asking the state “mainly about a loan or loan guarantee.” The airline has said it has “no interest” in the government acquiring a stake of any kind in Smartwings.
At the moment, the airline is owned by Czech businessman Jiri Simane and partners, who own 50.1% of the group. The remaining 49.9% is owned by CITIC Group Corporation, a state-owned investment vehicle for China. This ownership structure looks set to stay. It is a familiar model in aviation: Etihad owns 49% of Air Serbia, and Qatar Airways owned 49% of Air Italy.
The Czech government could buy up to 100% of airline operator Smartwings, the owner of Czech Airlines, or offer the national flag carrier state-guaranteed loans, Industry Minister Karel Havlicek said on Saturday.
The government would discuss the situation with Smartwings and a decision should be reached by the end of June. He said the group was of strategic interest.
Smartwings said it welcomed any discussions. “We still believe that further debate about support for the company, which employs 2,500 people, will play out in a businesslike manner,” the group said in a statement.
Havlicek said any government move would be an investment, adding the group could be sold later, possibly for a profit.
“We are not saying that it will happen but I look out for the interests of transport and industry. In this view, I think it is necessary to protect this type of firm, not only this type but others also,” he said.
The government has previously raised the possibility of guaranteeing loans for the group.
Smartwings’ Czech Airlines is set to resume flights on Monday after a disruption lasting a month and a half.
Smartwings is controlled by Czech businessman Jiri Simane and partners, who own 50.1% of the group. Chinese state-owned CITIC holds 49.9%. CITIC could not be immediately reached for comment.
The airline group handled 8.2 million passengers in 2019 and is the biggest operator out of Prague Airport.