Economic climate cited
Air France KLM has pulled out of the bidding for Czech Airlines (CSA), citing the current economic climate.
The decision leaves just one bidder, a consortium of Czech companies Unimex and Travel Service, for the national carrier which expects to make a pre-tax loss of CZK361m (€14m) this year.
AF KLM said in a statement that it had informed the Czech Ministry of Finance of its decision.
It added: "The current economic environment has significantly impacted the airline business.
"Under such circumstances, Air France KLM believes that CSA might focus on developing and implementing a stand-alone recovery plan aimed at restoring its profitability.
"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."
AF KLM reported a net loss of €426m at the end of last month for the first quarter of its financial year, compared with a €211m profit for the same period in 2008.
CSA launched an Action Plan last December to cut costs and increase revenues. Measures included a cut in staff wages and some lay offs.
It announced the "acceleration" of the Plan in July to cope with an estimated "double digit drop" in passengers numbers.
The airline said it was cutting the frequency or scrapping altogether some of its European routes.
The government also extended the deadline for bids from July 13 to September 15 for the airline which analyst say is worth about CZK5bn (€195m).
The AF KLM withdrawal comes amid a report in the Czech press that CSA is planning more job losses.
The Mlada fronta DNES newspaper said 860 of it CSA's 4,600 employees would be let go, including 140 pilots, 240 flight attendants and 15% of the management staff.
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