11. 12. 2008 - Czech Airlines Continues to Make its Operations More Efficient, with Savings Reaching Hundreds of Millions of Crowns

Prague, 11 December 2008

Czech Airlines continues to make its operations more efficient, even in the third year of its OK 2006 – 2008 Revitalisation Strategy. This year, the Airline agreed to new conditions with its suppliers for nearly 700 contracts, realising savings of nearly CZK 400 million in input costs, primarily on navigation fees, aircraft handling, and information technologies.

The Airline will continue to save and look for more efficient solutions in the future, as well. The goal is to prepare for the impact of the economic crisis, which is bringing reduced demand for air carriage and is expected to deepen in 2009. For the upcoming period, Czech Airlines’ management has therefore prepared a set of measures, including a focus on quick-return projects and on further cost cuts. “We are already taking measures in terms of input costs, i.e., agreements with our suppliers, which will bring savings in the order of hundreds of millions of crowns,” said the Managing Director of Supplier Service Management, František Šír.

The Airline will look for savings on input costs in 2009 primarily in the Technical Division. The division undertook a major improvement of the efficiency of maintenance administration and management, when a modern integrated system of maintenance management, MRO, was launched.  In connection with this improvement in the efficiency and clarity of the functioning of the Technical Division, from the operating perspective, Czech Airlines has now launched negotiations with its suppliers. “We have already opened negotiations over the prices of the supplies of parts and components for aircraft repair and maintenance.  We have approached all of the certified suppliers of original parts and components and are looking for more advantageous offers than the present conditions. We expect that by getting more advantageous long-term agreements with suppliers, we could achieve savings in the order of nearly 100 million crowns in the Technical Division alone,” said František Šír.

The Airline also expects to achieve significant savings, in the order of many tens of millions of crowns, by continuing in its efforts to use its real property more efficiently. A reduction in the cost of office space rental will be achieved, due to the planned relocation of individual organisational units.  In addition, the concentration of warehouse and workshop space will yield savings. Changes are also planned in the sphere of investments, where only priority investments are expected to be made, which will bring a fast return.

Other Projects Implemented Bring Savings
The latest example in achieving long-term savings is the increased efficiency of the reprographic environment. The replacement of all printers with more modern and efficient devices will bring Czech Airlines savings in the order of millions of crowns every year. In transferring to a modern reprographic system, the Airline will do away with the nearly one hundred various types of printers of 15 brands, using from now on only four types from a single manufacturer, Konica Minolta. This will bring significant operating savings and simplify maintenance.

In addition to the savings with the new reprographic system, we have recently successfully introduced a new web application, for keeping track of fees for flight and navigation services, which offers major potential savings with the acceleration of invoicing processes and simplification of the checks of the items charged. Expenses will be reduced by another few million crowns thanks to the successful advance negotiations over an agreement with our mobile operator and land-line provider.  And the new method of providing work-clothes to our employees will also be more cost-effective for Czech Airlines.

 

Daniela Hupáková
Communications Director
Czech Airlines Press Spokesperson