Cost cuts plan to boost Czech profits

Proposed organizational and personnel changes at Czech Airlines sales offices are projected to save the company tens of millions of crowns in coming years and will provide an additional boost to the airline’s profits. Offices, which were previously primarily responsible for operational and administrative activities, will now focus more on sales. Part of this restructuring process will include staff reductions - but, this should have no impact on safety or the quality or range of services offered. Approximately 56 employees who currently work at 45 sales offices abroad in 38 countries will be leaving the company by the end of the year, primarily from non-sales positions. This reduction will primarily affect regional offices that are not considered key from a ?SA business perspective.

“The aim of the restructuring process is to maximize the efficiency of our sales offices abroad. We want to establish an efficient, functional network of business oriented offices,” said the ?SA’s Vice President for Sales and Marketing, Petr ?ehák. A large part of the administrative work currently carried out by our individual offices will now be centralized and the offices will no longer have to do their own accounting or contracting out of legal work. This too will bring savings of millions of crowns. “The agent’s main task is to sell our products and acquire new customers and partners for ?SA,” explained Petr ?ehák. “Our head office will no longer burden our offices with excessive bureaucratic requirements and will instead provide direct support from a central facility.” ?SA generates approximately 80 percent of its revenue from foreign markets.

The reduction in the currently extensive non-sales staffing of our offices abroad will bring about a major saving in overall personnel costs while, at the same time, it will also free up funds for the hiring of new sales people at business offices where there is currently a shortage of qualified employees.

Starting in December 2006, ?SA will significantly simplify the range of different job categories at its offices.  Previously, the organizational structure of these offices was inconsistent and without job description for individual positions. Instead of the more than one hundred various positions with different job descriptions, as of December, there will be 215 non-sales and 64 sales agents broken down into 19 specifically defined job positions. The system of remuneration will also be standardized. Many people currently have above-market wages, which are often many times above the average wages for similar jobs in the respective regions.

The restructuring of our offices will be tied into our detailed analyses of the individual markets served and in part be based on newly acquired market data for the overall air transport segments. The results of these analyses will provide an overview of the market potential for each individual office, including a better understanding of the opportunities offered on different routes and the major markets served by ?SA. In markets where there is a reduced potential for revenue growth, ?SA offices may be replaced with external sales partners.