13. 09. 2007 - Czech Airlines Reports CZK 182 M Profit for the First Seven Months
Prague, 13 September 2007
In the first seven months of the year, Czech Airlines reported a profit of CZK 182 M, with CZK 357 M in profit in the month of July alone. These results show that the Airline is managing to fulfil its OK 2006-2008 Strategy, approved by the company’s general meeting in June 2006. The Strategy expects the Airline to return to profitability this year.
Czech Airlines’ finances in H1 2007 showed an aggregate after-tax loss of CZK 175 M. The result came in CZK 600 M (77 percent) better than in 2006, in spite of the Airline’s significantly greater financial commitments, and half a billion ahead of plan.
“We have managed to improve our financial results significantly over last year, and as compared to the plan, in spite of the fact that non-influenceable costs, on the instalment payments on aircraft and wages, have increased by another CZK 700 M,” said Czech Airlines’ President, Radomír Lašák, who added: “We have managed to start closing the gap between revenue and costs, which as at January 2006 had the Airline clearly headed for bankruptcy. In the first half of 2007, our results are again better than planned. The improvement is being driven by our meeting the plan in terms of revenues, and by achieving greater savings on costs. We continue to save and meet the plan in terms of revenue. The plan expects a result that is CZK 1 billion better than last year. We are closing the gap, from both sides at the same time. It is going slowly, but the trend is evident.”
Operating revenue is up, and we are managing to cut costs
Operating revenue has been successfully stabilised. Revenue from scheduled passenger carriage has increased by 2.3 percent, to CZK 8.052 billion. The reason is a greater number of passengers and greater yield per passenger-kilometre. Revenue from charters was up 9.3 percent, to CZK 1.171 bn. Also non-carriage revenue was higher, such as revenue from the maintenance of the aircraft of external customers, the technical servicing of external customers’ planes on the tarmac, both aircraft and passenger handling, and the leasing out of aircraft. Operating expenses in the first six months of 2007 reached CZK 11.23 billion, which constitutes a 2% y/y decrease.
Czech Airlines’ goal is to achieve greater revenue from better services. Testimony to the ever-increasing quality of our services is, for example, the fact that for the first six months of this year the Airline ranked first, in terms of its on-time flight record, among the 26 major airlines associated in the Association of European Airlines (AEA). In August, Czech Airlines won another award - “The Best Airline in Central Europe”, awarded on the basis of the votes of millions of passengers in the World Airline Awards ranking.
In the first six months of the year, Czech Airlines carried nearly 2.5 million passengers, representing a 1.1% increase over the same period last year. In the first six months of 2007, Czech Airlines’ aircraft also carried nearly 10,700 tonnes of goods and post. Overall, Czech Airlines operated over 19,200 flights.
“The revitalising OK 2006-2008 Strategy has reached its mid-point, and our latest financial results show that we are on the right track. Whereas 2006 was the year for achieving the Airline’s salvation, and of settling past liabilities, 2007 is the year for its stabilisation, and for making large decisions: about our aircraft fleet strategy the related issue of our long-haul fleet, and the completion of divestments,” said Czech Airlines’ President, Radomír Lašák.
Results according to International Accounting Standards
According to International Accounting Standards, Czech Airlines has reported a loss of USD 36.947 M before tax. Revenue has grown by 28 percent year-on-year, to USD 522.479 M. The difference in results according to Czech and International Accounting Standards is due primarily to the difference in the accounting of financial leasing, provisions, FX fluctuations, and the written-down value in the retirement of assets.
Czech Airlines’ long-haul flights
Czech Airlines will continue to operate its long-haul routes. In the years to come, the Airline will focus on the North American market, and will use, to the greatest extent possible, code-sharing and other forms of business cooperation with its partner airlines, and primarily with Delta Air Lines.
If affordable aircraft with a suitable configuration are on the market, Czech Airlines plans to include a new type of aircraft into its fleet. It would be either a Boeing 767 or an Airbus A330.
Currently, the Airline is working out the possibility of upgrading its Airbus A310 aircraft, which it will use to retain and develop long-haul charter flights. Presently, Czech Airlines operates flights to Cuba, Venezuela, and the Dominican Republic, to name a few. Czech Airlines is also planning to extend the financially successful lease of an Airbus A310 to the Indian airline Air India, as well as other similar products.
Czech Airlines has also decided to exercise an advantageous contractual option to obtain eight Airbus A319 aircraft, to be delivered in 2011 – 2012.
Czech Airlines Spokesperson