Ruzyne posts record year on low-cost airline boom
Although losses continued to cripple most airlines in 2003, local carrier Czech Airlines (CSA) experienced a surge in
passengers, prompting the airline's management to continue its expansionist strategy in 2004. "CSA is planning
to expand and grow next year," said Michal Pozar, vice-president for marketing and sales with CSA. "We see
next spring, when the Czech Republic joins the EU, as an opportunity [to grow] rather than as a threat." The global
airline industry has posted losses of around $30 billion since the Sept. 11 terrorist attacks in 2001, according to a
recent report of the International Air Transport Association (IATA), which groups 270 airlines worldwide. The industry
is expected to slowly recover from the attacks, the Iraq war and SARS epidemic and make a profit of $2.8 billion in
2004, IATA reported. But CSA has already turned the corner. The number of passengers increased by 15 percent in the
first 10 months of 2003 when the airline transported 3.02 million passengers. It expects that number to reach 3.5
million by the end of the year. The increase was partly helped by the addition of an Airbus A310 and three Boeing 737s
to CSA's fleet and the launch of five new destinations, including Edinburgh, Scotland; Yerevan, Armenia; and the
Slovak spa Sliac. It will add more aircraft and destinations in the spring of 2004, Pozar said, including Ekaterinburg
in Russia, Baku in Azerbaijan and Dortmund, Germany. Airport growth CSA airline's overall strategy still has to be
finalized by CSA president Jaroslav Tvrdik in February. The intention is to transform CSA into a pan-regional airline
that will serve destinations in the European Union and Eastern Europe and be one of the strongest players in the SkyTeam
alliance, which includes Korean Air, Delta Air Lines, Alitalia and Aeromexico. "Even now, we are a gateway to
eastern destinations for our SkyTeam partners via our domestic hub, Prague," Pozar said. "We'll continue
developing this position." Czech Airports Authority (CSL) stands to benefit from CSA's expansion. The Czech
airline accounts for half of the flights in and out of Prague-Ruzyne airport. The airport already set a new annual
record for passengers on Dec. 7 when the 7 million mark was passed. The full-year number is expected to be around 7.43
million, a 17.5 percent increase compared to 2002. London, the largest hub airport system in Europe, has around 63
million passengers a year followed by Paris with 48 million passengers. Aggressive marketing, which has contributed to
Prague airport's traffic growth, will continue in 2004, Anna Kovarikova, CSL's spokeswoman, said. Landing fees
at Ruzyne airport will be reduced from Kc 290 ($11.15) per tonne of the aircraft's maximum permitted take-off
weight to Kc 230 ($8.84) from Jan.1. CSL already offered generous discounts in 2003. It halved landing fees in April to
encourage traffic to pick up after the Iraq conflict. It also halved fees for airlines that launched flight services
from Prague to destinations that had not been served before. The take-off of low-cost airlines flying into Prague was a
major factor in the airport's record-breaking performance. Low-cost airlines carried over 400,000 of the
airport's passengers in the first three quarters of 2003, a 116 percent increase from 2002. Last year, only one
low-cost airline, EasyJet, was flying to and from Prague with one route from London's Stansted. EasyJet now flies
from four U.K. airports to Prague. Seven more low-cost airlines launched routes to the Czech capital this year. BMI Baby
flies from three U.K. destinations; Jet2 flies from Leeds-Bradford airport; FlyBe has one route out of Southampton;
Germanwings has routes from Cologne and Stuttgart, Germany; Italian Volareweb flies from Venice and Milan; Slovak
SkyEurope from Kosice, east Slovakia; and Snowflake from Stockholm. And the expansion isn't over. One by one, the
low-cost airlines made announcements this year of further growth that is likely to continue to threaten traditional
airlines' market share. EasyJet has been negotiating with 50 airports with the aim of launching new services. While
CSA's Pozar said the airline hadn't noticed a drop in the number of passengers due to low-cost carriers, CSA
is taking them seriously and plans to counterattack. In mid-November, the supervisory board of CSA decided to start
negotiations to acquire all of the country's biggest charter airline, Travel Servis, and then turn it into a
low-cost carrier serving Western and Eastern Europe. The airline will operate under a new logo and should be launched in
March 2004. A new brand name has been already chosen, but the company won't disclose it before the deal to buy
Travel Servis has been concluded. If successful, the purchase would also strengthen CSA's position in the charter
flights segment, where Travel Servis has around 70 percent of the market. With Travel Servis under CSA's wing,
competition will become even fiercer with the third-largest charter airline, Fischer Air. CSA's existing charter
airline is No. 2 on the Czech market.
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