CSA anticipates losses for the full year as a result of Kosovo crisis

Published: 10/25/1999

Czech Airlines (CSA) has announced that it will post a net profit of around 50m crowns in the first nine months of 1999, but for the full year would report a loss of 50-150m crowns after a net profit of 414m crowns in 1998. Vaclav Kral, Marketing Director, said that CSA had expected a net profit of 280m for the entire year, but had suffered from the effects of the war in Kosovo, rising fuel prices and a fall in demand on Russian routes. The comparative net profit for the first nine months of 1998 was not provided. Over the period, the total number of passengers rose to 1.57m from 1.40m compared to 1998. Seat load factor fell to 66.4% from 67.6%. Cargo shipments edged higher to 8,814 tonnes from 8,505 tonnes. Kral said that the airline recorded a significant drop in traffic growth after the start of NATO's bombing in Kosovo, but that results for September and October showed a recovery. He added that the fall in demand on routes to and from Russia after the 1998 Russian economic crisis led to a loss of 120m crowns so far this year, while rising fuel prices added an unexpected 175m crowns to overall full-year costs. Kral also attributed the full-year loss to a domestic recession and stagnation of the industry worldwide. From October 31st, CSA is planning a 20% increase in flights, with Dublin and Goteborg cited as new destinations. Hannover and Berlin are to be reinstated, while flights to Kuwait will be dropped owing to lack of demand.

Article ID: 1005