04. 09. 2008 - Czech Airlines Operational Results Up by CZK 650M y/y in H1 2008
In spite of the crisis in the industry, it has kept its financial results on last-year’s level
Prague, 4 September 2008
Czech Airlines achieved an operating profit of CZK 201 million in the first half year. That means a year-on-year improvement by 650 million crowns, in a situation when the entire industry is burdened by the cost crisis caused by high oil prices, and a number of airlines have announced a cut-back in their activities and lay-offs. The overall financial results for the first half is on last year’s level, with a loss of CZK 178 million.
“In the first half of the year, Czech Airlines managed to nearly entirely offset increased fuel costs and the impact of the strong crown by operational improvements. We have managed to increase our income from scheduled carriage by 560 million crowns, year-on-year,” said the Airline’s President, Radomír Lašák.
Increased prices of oil offset by operational improvements
Czech Airlines is increasing its income and, in spite of the sharp increase in the price of oil, it is managing to reduce its overall operating costs. In the first half, operating income grew year on year by 377 million crowns, to CZK 11.17 bn. At the same time, operating costs dropped by 273 million crowns, to CZK 10.97 bn, in spite of the cost of fuel having grown dramatically. The increase of the cost of fuel, which was mitigated by fuel hedging in the first half of the year, and by the impact of exchange rates, meant an additional 179 million crowns for Czech Airlines in a year-on-year comparison.
Czech Airlines is managing to cover the losses caused by the high price of aircraft fuel by increased income from carriage. Year on year, it has managed to increase carriage income by CZK 560 million, i.e., 7.5 percent (not including fuel surcharges and having reflected the impact of exchange rates). Income from charters meant an increase by 266 million crowns, which is a whole 22 percent.
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