25. 11. 2010 - The Government Approved the Creation of Czech Aeroholding
Prague, 25 November 2010
At its meeting yesterday, the government approved the creation of a holding company, comprised of government-owned companies in air carriage and ground services. The integration of Czech Airlines, its subsidiaries, and Prague Airport into the newly established joint-stock company called Czech Aeroholding will establish a stable and strongly capitalised entity directly overseen by the government, which will achieve significant operating and financial savings due to numerous synergies.
The present business relations between Prague Airport and Czech Airlines
The business relations of Czech Airlines and Prague Airport are already very close. Czech Airlines carries approximately 5.2 million passengers per year, which accounts for about 45% of all passengers at Prague Airport. Approximately 2.7 million transfer passengers pass through the airport, 90% of whom are Czech Airlines’ passengers. Czech Airlines’ use of the infrastructure of Prague Airport (e.g., aircraft parking, boarding bridges) accounts for more than 50% of its utilisation.
The main benefits of the new model of functioning
The financial management of the individual companies under the holding company will have a positive impact on cost reduction, thanks to the sharing of services, for example, in information technologies, human resources, call centres, accounting, the procurement of goods and services, and aircraft and passenger handling, etc. At the same time, the value of the assets for the main shareholder, the state, will also increase. “I welcome the government’s decision. The setting up of a holding structure is a logical continuation of a process that started with the Czech Airlines restructuring plan last autumn. In addition to the stabilisation of the national carrier, the project will continue with the further development of Prague Ruzyně Airport as a Central-European transportation hub,” said Miroslav Dvořák, CEO and Chairman of the Management Board of Prague Airport and President and Chairman of the Management Board of Czech Airlines. Last but not least, the holding company will obtain more satisfactory terms when arranging long-term financing for the entire group and its subsidiaries.
Structure of the Holding
The role of the newly set up parent company, Czech Aeroholding, j.s.c., will be to coordinate, financially manage, and implement synergies throughout the group. Each subsidiary from the group will thus be able to focus on its core business – operating an airport (Prague Airport); operating scheduled carriage (Czech Airlines); operating irregular carriage (charters – Holidays Czech Airlines); ground aircraft and passenger handling (Czech Airlines Handling); aircraft maintenance (Czech Airlines Technics); pilot, steward, and technician training (a subsidiary will be established); and Facility Management (a subsidiary will be established). All subsidiaries will be autonomous in terms of their business and will maintain level conditions with respect to all business partners (e.g., all air carriers, in the case of Prague Airport). In the case of any company in the holding encountering difficulties, their separate functioning will also ensure protection for the others from any adverse impact caused thereby.
The project is self-financed, without making any claims on the state budget. The holding structure has been designed in line with national and European competition law. The implementation of the project is subject to approval by the national authority, the Office for the Protection of Economic Competition. The transition to a holding structure will be gradual, in several connected stages. The project should be completed by the end of 2012.
Contatcts for media: