Despite the unprecedented situation in 2020, Smartwings has emerged from the coronavirus crisis and continues restructuring successfully

December 30, 2021
Due to the impact of the Covid-19 pandemic, Smartwings, a. s., recorded a 84% decrease in the number of transported passengers and a drop in sales of CZK 13.8 billion in 2020. This, together with depreciation of a financial investment into Czech Airlines, resulted in a loss of 2.5 billion crowns. In 2020, the company also faced strong negative economic impacts in association with grounded Boeing 737 MAX aircraft. In 2019, the company reported a profit of 133.4 million crowns, though, with revenues reaching 18.2 billion crowns. Before the coronavirus crisis broke out, Smartwings had been profitable for many years in a row and one of the fastest growing airline businesses in Central Europe. The company is currently undergoing a successful restructuring.

“2020 was an exceptional and extremely challenging year for the aviation industry, including Smartwings. It was the most difficult year in the company’s 25-year history, as we did our best to keep the company running. We expect the financial results for 2021 to be in the black and we believe that demand will continue recovering in 2022,” says Jiří Jurán, Board Member and Chief Financial Officer, Smartwings, a.s.

Smartwings, a.s., as well as České aerolinie a.s., was seriously affected by the greatest global aviation crisis in history caused by the Covid-19 pandemic and related government measures in virtually all countries around the world. However, the losses suffered by the company as a result of the coronavirus crisis in 2020 was orders of magnitude lower than those incurred by other airlines (Lufthansa - CZK 175.5 billion; British Airways (IAG) - CZK 194 billion; Ryanair - CZK 20.8 billion; Air France-KLM - CZK 184 billion; El Al - CZK 11,7 billion, etc.), although most of these companies, unlike Smartwings, received targeted multi-billion state aid.

During the emergency in the spring months of 2020, air traffic was completely suspended for a certain period. Smartwings Group immediately responded to the needs of Czech citizens and to government requests and offered its resources to transport necessary medical supplies from Asia and to repatriate Czech nationals from other countries.

According to the International Air Transport Association (IATA), the Czech air transport industry has been hit the hardest of all European markets due to the pandemic and associated travel restrictions. Nevertheless, Smartwings Group has remained the largest air carrier at Prague Airport.

In response to the Covid-19 pandemic and associated measures, Smartwings Group adopted a number of radical austerity measures and laid off six hundred employees.

In March 2021, the company managed to reach agreements with local banks led by UniCredit Bank Czech Republic and Slovakia leveraging the state sponsored Covid Plus loan guarantee program, and the company was granted a syndicated loan of CZK 2 billion, with a guarantee by EGAP covering 80% of its principal. UniCredit Bank acts as the syndication agent. At the same time, we managed to reach a range of restructuring agreements with key business partners. The company also received financial aid amounting to hundreds of millions of crowns from its Czech shareholders, with the greatest from Unimex Group.

Smartwings, a.s., a member of Smartwings Group, is the largest Czech airline. In the summer season, it offers flights from Czech airports to 80 destinations.

Smartwings Group, whose members include airline companies Smartwings, a.s.; Smartwings Poland, Sp. z.o.o.; Smartwings Slovakia, s.r.o.; and Smartwings Hungary, Kft, operates flights not only from the Czech Republic, but also in Poland, France, Germany, Israel, Hungary, Slovakia, the Canary Islands, and other countries. Besides scheduled and charter flights, Smartwings also provides a wide range of special flights for international sports clubs and major humanitarian and athletic organizations worldwide. Smartwings Group operates a fleet of 43 airplanes.