04. 09. 2008 - Czech Airlines Reported a Profit of USD 209,000 for H1, According to IFRS
In spite of the industry crisis, its financial result improved year on year
Prague, 4 September 2008
In the first half of 2008, Czech Airlines generated a profit of USD 209,000 according to International Financial Reporting Standards (IFRS). That means a year-on-year improvement of USD 37.1 Million, in a situation when the entire industry is burdened by a cost crisis caused by high oil prices, and when many airlines have reported reductions in their activities and lay-offs. Operationally, Czech Airlines has a profit of USD 15.3 Million for the first half.
“In the first half of the year, Czech Airlines managed to nearly entirely offset its increased fuel costs and the impact of the strong crown, by operational improvements,” said the Airline’s President Radomír Lašák.
Increased oil prices compensated by operational improvements
Czech Airlines’s income is up and, in spite of the sharp increase in the price of oil, it is managing to reduce its overall operational costs. In the first half, income from air carriage increased year-on-year by USD 150.3M, to USD 669.7M, according to IFRS. Overall revenue was up by USD 177.5M, to USD 700M. The year-on-year growth is significantly influenced by the development of currency exchange rates.
In the first half of this year, Czech Airlines carried over 2.6 million passengers. Compared to the same time last year, this constitutes an increase of 5.9 percent. In the first six months of 2008, Czech Airlines aircraft also carried over 10,100 tonnes of cargo and post. Overall, Czech Airlines operated more than 20,000 flights. In spite of fuel-saving measures, Czech Airlines has maintained a leading position in the on-time departure record in the first half of the year. Among the 26 airlines associated in the Association of European Airlines, it ranked 2nd in on-time departures.
“The OK 2006-2008 Revitalisation Strategy is closing in on its target date, and the latest financial results indicate that we are on the right track. In spite of the record price of oil, which makes financial management significantly more difficult, we expect a profit at the end of the year”, said Radomír Lašák.
Development of the Airline
With the last year of its revitalisation strategy, and as a part of its follow-up 2009-2013 Development Strategy, Czech Airlines will launch one of its three large development projects at the end of this year: the MRO Project – a new, integrated information system for aircraft maintenance administration and management. The new method of managing and planning maintenance, and of keeping track of and administering aircraft units and spare parts, will significantly reduce costs and increase the efficiency of the operations of the Czech Airlines
Technical Division, which provides the repair and maintenance of Czech Airlines own aircraft equipment, and also provides its services to external companies. A new, comprehensive airline system is also being prepared (SAS) to support key sales activities, such as booking, pricing, ticket issuance, passenger and baggage handling, and Internet sales, as well as a modern pricing methodology, referred to as O&D. All these projects will yield savings in the order of hundreds of millions of crowns and a further increase in profitability.
Czech Airlines Press Spokesperson