Czech boosted by rare profit

According to preliminary results, after years of losses, Czech Airlines has reported a profit of CZK 111 M.Its financial results are more than half a billion crowns better than in 2006, when its finances ended up with a loss of CZK 396 M.  The plan for 2007 had expected a profit in the range of CZK 40 M.

“We are successfully meeting our three-year OK 2006 - 2008 strategy, whose main goal was to lead the Airline from its losses and direct it towards further development,” said Czech Airlines’ President, Radom’r La?ák, in commenting on the results.  “Today, the Airline is stabilised, and prepared for potential privatisation, and we can say with a large degree of certainty that Czech Airlines can expect further growth,” he added.

The 2007 results include extraordinary income from the sale of the Air Cargo Terminal subsidiary, with a net impact on the financial results of CZK 50 M.  That means that, even without the Cargo divestment, Czech Airlines would have ended up with a profit of approximately CZK 60 M.  The income from the sale of Air Czech Catering will not reflect in the 2007 results at all, as the transaction will not be settled until 2008.  “We managed to make up for the missing income of some CZK 380 M, for which we had originally planned in the 2007 results, by revenue from our main business line, i.e., air carriage,” said Radom’r La?ák.  “Furthermore, we repaid operating loans of one billion crowns last year, and invested CZK 1.4 billion into aircraft.  In 2008, we plan to invest a further CZK 1.7 billion.  The value of the Airline and its financial stability are thus on the rise,” he added.   

The Airline’s stability is also enhanced by the fact that, since January 2008, it has had three-year collective agreements concluded with all of its nine trade unions.  The agreed salary increases range from one to two percentage points above inflation, depending on the Airline’s financial results.