8. 8. 2006 - Czech Airlines is offering its 'OK Agreement' program to employees who decide to leave the company on their own.

Prague, August 8, 2006

As part of its OK 2006 – 2008 three-year restructuring program, Czech Airlines (CSA) is taking additional steps to lead to a revitalization of the company – transforming the airline into a competitive and profitable passenger air carrier. As part of its moves to cut operating costs and to boost productivity, CSA will offer its employees, with whom an agreement to leave the company is reached before the end of August 2006, a severance package equal to nine (and in some cases ten) times their average monthly salaries. 

"It is a standard, one-time and fair solution. It will provide assistance to our employees with a problem-free departure and a new start. It is a solution, which is favourable to both parties – both financially and socially – to the employee and to CSA. It provides a quick healing process, which will end the period of uncertainty hanging over CSA and stimulate our future growth,"  said Radomír Lašák, President of CSA. He added, "We need to succeed in today's highly competitive environment. CSA needs to tighten its belt by cutting costs and reducing the numbers of its management staff. We are aware of the fact that leaving a job is not easy and that is why we decided to come up with the 'OK Agreement' severance program. About 10-20% of our employees will be leaving the company – not because they haven't been doing a good job but because CSA cannot offer a positive future for all of its almost 5,500 employees."
The 'OK Agreement' program, which is set to be launched on August 14, 2006, has already been announced to both the unions and to the individual employees. CSA will make a special severance payment to those employees who submit a voluntary severance application for the termination of employment through this program between August 14 – 24, 2006 and whose application is accepted after review by the company. The program is in harmony with the basic mission statement of the OK 2006 – 2008 Strategy – safety, quality, economic utility, a focus on the customer and a friendly approach.  

"The primary consideration for the 'OK Agreement' program is that it does not in any way disrupt the safe and smooth operations of the airline and the quality of the services that it offers. That is why each vice president of the company has veto power – the option to reject or postpone any employee's notice of resignation – if that employee is indispensable to the company or if the company has invested resources into that employee such that his or her departure would not be financially prudent for the company," said Dušan Ryban, CSA's Vice President for Human Resources and a Member of the Board of Directors.

To those employees who have been with the company for 25 years or more, or who have five years or less remaining before retirement, or employees who are single parents with young children, the company is offering a special severance package equal to ten-times their average monthly salary. To other full-time employees, the company will offer a severance package equal to nine-times their average monthly salary. The 'OK Agreement' program is primarily targeted at those employees whose positions are to be cancelled.

The belt-tightening in the terms of overall staff size and the streamlining of the organizational structure will also impact management positions. The individual CSA vice-presidents were given the task of coming up with proposals for reductions in the number of management positions in their divisions – reducing the total number of management levels to a maximum of three. The majority of these redundant managers will leave the company without participating in the 'OK Agreement' program – i.e. under standard redundancy conditions without participating in the special severance package.

CSA currently employs 5,500 persons. As of March 1, 2006, every new hire has been subject to approval by the president of the company and the hiring of new staff has been significantly reduced. The number of staff who will be leaving the company under the 'OK Agreement' program will depend on the level of interest shown by the employees and it will be their own decision. All applications will be reviewed and the applicants will be notified in writing of all decisions by the end of August 2006.

Jana Víšková
Czech Airlines Spokesperson