DJ Czech Airlines: Using 8 Of 49 Planes As Loan Collateral

PRAGUE (Dow Jones)--Indebted CSA Czech Airlines, or CSA, is currently using eight of its 49 aircraft as collateral for bank loans and has no plans to pledge other planes to raise additional loans to remain financially afloat, it said Thursday.

"The collateral lien on two [of the eight] aircraft is currently being lifted and on the remaining [six] it will be lifted in the course of the summer season," the carrier said.

The rest of CSA's fleet is on lease contracts.

Earlier Thursday budget carrier Ryanair Holdings PLC (RYAAY) said the airline had "moved closer to bankruptcy by using its entire fleet as collateral against bank loans which it requires simply to maintain its operations."

CSA said Rynair's statement was unfounded and misleading.

"We view today's assertion by Ryanair as an attack [on CSA] which is in breach with the fair level-playing field competition," CSA spokeswoman Hana Hejskova told Dow Jones Newswires.

Ryanair's assertions on the CSA's financial health "are slandering and construed," Hejskova said.

The Czech government canceled its plan to privatize CSA in October, when only one eligible bidder in the sale, a consortium of Czech financial firm Unimex and local charter airline Travel Service, made a bid the state said was too low.

Company Web site: www.csa.cz

-By Leos Rousek, Dow Jones Newswires; +420 222 315 290, leos.rousek@dowjones.com

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(END) Dow Jones Newswires

March 04, 2010 11:04 ET (16:04 GMT)

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