Many European airlines have been hit hard by economic turbulence in the region, high fuel costs and the rise of low-cost carriers like Ryanair.
Smaller airlines in central Europe have had a particularly tough time, with Austrian Airlines taken over by Lufthansa after running up losses, Hungary's Malev gone bankrupt and Poland's LOT struggling with mounting debts.
Korean Air, already Czech Airline's (CSA) partner in the Sky Team global alliance of airlines, was the only bidder for the 44 percent stake and will pay 2.64 million euros ($3.4 million), a price derived from an independent audit.
"This completes a restructuring process that aimed to save CSA's future," Finance Minister Miroslav Kalousek told reporters.
A government source said the contract would be signed on April 9.
Korean Air already operates direct flights to the Czech capital, and under the privatisation plan it will make Prague one of its transfer points in Europe. CSA will re-enter long-haul service with two weekly flights to Seoul as of this summer.
Kalousek said the sale met the EU's requirements related to state financial support for CSA in recent years, and would help boost business for Vaclav Havel Airport Prague.
CSA, founded in 1923 and one of Europe's oldest carriers, has suffered financially since a failed expansion plan last decade and has had to undergo a tough restructuring programme including the sale of a substantial part of its assets, including cargo, servicing and handling operations.
It carried 4.25 million passengers in 2011 and lost 241 million crowns ($12.3 million) that year, the last period for which results are available. The airline has cut its fleet to 26 planes.
An attempt to privatise CSA in 2009 collapsed after the bidder, Czech charter airline Travel Service, refused to proceed without securing a capital injection from the government.
The finance ministry reached out to global airline companies at the start of the renewed sale process last year, getting initial responses from Korean Air and Qatar Airways. However, Qatar Airways did not file a final bid. (Reuters)
