* Government selling 91 pct of Czech Airlines
* Russian carrier blames 'artificial' security concerns
* Private equity firm Odien also excluded from bidding
(Adds Aeroflot reaction, background)
PRAGUE, April 20 (Reuters) - Czech authorities picked Air
France-KLM AIRF.PA to bid in a tender for flag carrier Czech
Airlines but ruled out Russia's Aeroflot, which blamed
"politicised and artificial" security concerns for its
A consortium comprising Czech companies Unimex and Travel
Service ICEAIR.IC also advanced to the second round of bidding
while private equity firm Odien did not.
Finance Minister Miroslav Kalousek told a news conference
the cabinet had used "formal, security, and international"
qualification criteria to make its decision. Both he and Prime
Minister Mirek Topolanek declined to comment further on why it
had rejected Aeroflot and Odien, which has offices in the Czech
Republic and Turkey.
Czech politicians have voiced concerns Aeroflot may not be
an ideal buyer for the carrier from the security point of view
as the Russian carrier's ownership structure was unclear.
Prague has in general been wary about Russian involvement in
Czech industries, especially ones that are considered strategic.
Topolanek's outgoing centre-right administration, a close
ally of the United States, also backed Washington's plans to
build a missile defence base in the central European country, a
project vehemently opposed by Russia.
Aeroflot said any security concerns surrounding its bid were
"If we took decisions (not to bid) ourselves in the past,
now someone else took that decision for us," the carrier's
deputy general director Lev Koshlyakov told Reuters.
"It was alarming that (Czech officials) have expressed
concerns about threats to national security because of
Aeroflot's bid... We think those remarks look absolutely
politicised and artificial."
CARETAKER GOVT TO COMPLETE SALE
The government is offering a 91.5 percent stake in Czech
Airlines (CSA) and the sale is expected to continue despite
Topolanek's resignation last month.
New Prime Minister Jan Fischer is building a caretaker
cabinet that will take the country to an early election expected
in October and Kalousek said he expected that cabinet to make
the decision on the sale.
Analysts expect the sale of the relatively small European
airline, hit by leasing costs as well as the impact of the
global economic downturn on demand for air travel, to fetch up
to 5 billion Czech crowns ($240 million).
Government officials had said it was necessary to privatise
the airline quickly as the economic crisis could further worsen
its weak financial position, hurt by the previous management's
ambitious expansion plans.
CSA, Air France and Aeroflot are all part of Sky Team, an
alliance of carriers led by Delta Airlines DAL.N.
Air France acquired a nearly 40 percent stake in CSA in
early 1990s for $60 million but sold it back to the Czech state
for $27 million in 1992.
CSA's 50-aircraft fleet flies to most European capitals.
(Additional reporting by Anton Doroshev; Editing by Rupert
Winchester, John Stonestreet)