European Union regulators opened an in-depth probe into Czech Airlines on Wednesday, saying they doubted the carrier’s revamp would return it to viability and also comply with EU state aid rules.
Reuters reports that the Czech government unveiled plans last November to put the loss-making airline and Prague airport, both of them state-owned, under a single holding company as part of the carrier’s restructuring.
Czech Airlines’ overhaul includes reducing its fleet and network by up to a third and refocusing on its core business.
The European Commission said it was doubtful the merger of the airport and the airline could contribute to the carrier’s restructuring.
According to Reuters, the watchdog said it also doubted a loan of 2.5 billion crowns (94 million euros) from state-owned firm Osinek and several other measures could be considered as part of the overhaul.
“The Commission must make sure the company contributes its fair share of the burden and that it is ultimately viable without further state support,” EU Competition Commissioner Joaquin Almunia said in a statement.
Commission competition investigations typically last several years.