ANNUAL REPORT 2003 CZECH AIRLINES

ANNUAL REPORT 2003 CZECH AIRLINES
Amsterdam, Athens, Baku, Barcelona, Beirut, Belgrade, Berlin, Birmingham, Bologna, Bratislava, Brno, Brussels, Budapest, Bucharest, Cairo, Cologne, Colombo, Copenhagen, Cork, Dortmund, Dubai, Dublin, Düsseldorf, Edinburgh, Ekaterinburg, Frankfurt,
AT HOME IN THE SKIES FOR 80 YEARS
Gothenburg, Hamburg, Hannover, Helsinki, Istanbul, Karlovy Vary, Kiev, Kosice, Krakow, Kuwait, Larnaca, Ljubljana, London/Heathrow, London/Stansted, London/Gatwick, Luxembourg, Madrid, Manchester, Marseilles, Milan, Montreal, Moscow,
1923 – 1930 An Aero A-14, controlled by Karel Brabenec, later to
become CSA’s chief pilot, symbolically launched the operations of
the first airline in Czechoslovakia by flying around Kbely Airport.
In 1923, Czechoslovak State Airlines transported thirteen passengers
on the Prague – Bratislava – Prague route and seven passengers on
a demonstration flight in âeské Budûjovice on 18 – 20 November 1923.
In the second half of the 1920s, the first CSA logo appeared on the
company’s aircraft: a stylish silhouette of a bird in a circle, with its
head facing upwards. This logo was used on the aircraft, documents,
and tickets of CSA into the first few years of the 1930s.
1940 – 1950 The promising developments of the Czechoslovak
airline were halted by events in the wake of Munich 1938. Many
Czechoslovak civilian pilots were frontline fighters during the Second
World War, and some lost their lives in combat.
After the war, CSA did not own any aircraft, and organized
international operations in association with Aeroflot and ABA.
Regular CSA flights were resumed on 1 March 1946; the first link
was between Prague and Zürich. Subsequent destinations included
Paris, Amsterdam, Stockholm, London, and Warsaw.
1960 – 1970 The first transatlantic flights began in 1962, operated
by two aircraft leased from the Cuban airline Cubana – the first
destination was Havana.
Increased operations required additions to the CSA fleet and an
expansion of the airport at Ruzynû. In 1964, the construction of
a new check-in building began.
In 1964, Czechoslovak Airlines transported over a million passengers
for the first time in its history; most passengers were on domestic
flights.
1980 – 1990 The 1980s were a time of cost-cutting measures due to
the global economic crisis, caused in part by rising fuel prices.
In 1989, there was a change in CSA’s status, when it was transformed
from a national enterprise into a state enterprise, and the events of
17 November and the subsequent political and economic upheaval
heralded a new era in the development of CSA.
In 1990, CSA became the 22nd member of the Association of European
Airlines (AEA).
1930 – 1940 CSA launched its first international operations in 1930
with a regular flight to Zagreb, later extended to Split and Dubrovnik.
The first radio equipment was used in CSA aircraft in 1932 – this
development increased the regularity and safety of operations, and
made night flights, flights in poor weather conditions, and flights
with zero visibility possible.
In 1934, a new logo was officially launched – the silhouette of
a swallow flying from right to left in a circle, with the abbreviation
CSA in the upper section of the design. This logo was used
throughout the pre-war period.
1950 – 1960 CSA, in cooperation with Aeroflot, opened the first
route in the world operated by jet aircraft (using the TU-104).
At the beginning of the 1960s, CSA enjoyed something of a revival,
and its output again came close to that of other European airlines.
On 14 August 1960 a CSA aircraft crossed the equator for the first
time and landed in the southern hemisphere. It took a Tupolev
TU-104 fifteen hours to cover the 13,944 km to Jakarta.
1970 – 1980 In 1973, CSA’s fiftieth anniversary, there were
49 international and 10 Czechoslovak destinations operated by the
company.
On 5 September 1978, a CSA aircraft transported one of the most
valuable stamps in the world, the Blue Mauritius, which was
exhibited at the Praga 78 philatelic exposition.
In 1979, CSA transported more than two million passengers on
domestic and international flights for the first time in its history.
1990 – 2003 By agreement with the company’s strategic partner,
in 1992 CSA was transformed into a public limited company. Its
shareholders were Air France and the European Bank for
Reconstruction and Development.
In 1995, Czechoslovak Airlines changed its name to Czech Airlines,
but retained the abbreviated form CSA. The company designed
a new logo to mark the change.
On 22 March 2001, CSA became the fifth member of the international
SkyTeam alliance. Over the eighty years of its existence, CSA has
transported 71 million passengers and 743,000 tonnes of goods and
mail.
Czechoslovak Airlines was officially established on 6 October 1923. The first route, between Prague and Bratislava, was launched on
29 October 1923. In 1929 CSA became a fully-fledged member of the International Air Traffic Association (IATA).
Munich, New York/J. F. Kennedy, New York/Newark, Oslo, Ostrava, Paris, Riga, Rome, Samara, Sliac, Sofia, Split, St Petersburg, Stockholm, Stuttgart, Tallinn, Tatry/Poprad, Tel Aviv, Thessalonica, Toronto, Venice, Vienna, Vilnius, Warsaw, Yerevan,
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When our young country was given an
aviation company, Czechoslovak State
Airlines, to mark the fifth anniversary of
its independence, and a locally designed
Aero A-14 two-seater circled the airfield,
the heads of all the “birthday guests”
began to spin. These days, people do not
even bother to look up when a highcapacity Airbus flies over. Only the really
brave dared enter the cockpit back then,
but now everybody takes flying for
granted, and with good reason. Immense
progress has been made in the 80 years
since CSA’s foundation, and the airline
has come a long way since those early
days thanks to all those who have shared
in this development.
Zagreb, Zürich, Amsterdam, Athens, Baku, Barcelona, Beirut, Belgrade, Berlin, Birmingham, Bologna, Bratislava, Brno, Brussels, Budapest, Bucharest, Cairo, Cologne, Colombo, Copenhagen, Cork, Dortmund, Dubai, Dublin, Düsseldorf, Edinburgh,
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Entering the European Union as a respected partner
Czech Airlines (CSA) is the Czech Republic’s biggest carrier, a competitive and efficient
company. In 2003, CSA carried 3,591,456 passengers and transported 21,092 tonnes
of freight and mail. It provided scheduled air transport to 40 countries and 66 cities
throughout Europe, Asia, North America, the Middle and Far East, and Africa. Thanks to
CSA, the Czech Republic has become one of the main centres in Europe. Our planes
covered over 54,517,000 kilometres, completing 54,758 departures and 27,022 flights.
As passenger numbers have risen, CSA’s range of services has steadily expanded and,
thanks to our cooperation with other prominent world airlines, existing connections
have intensified. The efficiency of transportation is underscored by the completely
modern aircraft fleet, which boasts three types of planes – Airbus, Boeing and ATR.
For three years, CSA has been a full member of the SkyTeam Alliance along with five
other air carriers – Air France, Delta Air Lines, AeroMexico, Korean Air and Alitalia.
Through Alliance membership, CSA has become part of a global system boasting a fleet
of 1,700 aircraft and offering nearly 8,000 departures daily to more than 500 destinations
in 110 countries worldwide.
Ekaterinburg, Frankfurt, Gothenburg, Hamburg, Hannover, Helsinki, Istanbul, Karlovy Vary, Kiev, Kosice, Krakow, Kuwait, Larnaca, Ljubljana, London/Heathrow, London/Stansted, London/Gatwick, Luxembourg, Madrid, Manchester, Marseilles, Milan,
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Contents
C
D
E
F
G
H
I
Selected Economic and Transport Indicators
6
CSA Shareholders
7
Foreword
8
J
K
L
CSA’s Financial Results
20
Commercial and Marketing Strategy
21
Passenger Transport
21
Flight Schedule
24
Company Governing Bodies and Management
10
Flight Network Expansion in 2004
24
Board of Directors
10
Cooperation with Other Airlines
26
Supervisory Board
12
CSA as a First-Rate Brand Name
28
Executive Management
13
Prizes Awarded for 2003
29
Rewarding Loyalty – Frequent Flyer Programme
30
Company Organization Chart
14
Perfect In-Flight Care
31
CSA for Children
32
Transport Results
18
Destinations
19
M
SkyTeam Alliance
33
CSA’s Membership of the SkyTeam Alliance
33
Montreal, Moscow, Munich, New York/J. F. Kennedy, New York/Newark, Oslo, Ostrava, Paris, Riga, Rome, Samara, Sliac, Sofia, Split, St Petersburg, Stockholm, Stuttgart, Tallinn, Tatry/Poprad, Tel Aviv, Thessalonica, Toronto, Venice, Vienna, Vilnius,
B
N
O
P
5
The CSA Fleet
38
The Czech Airlines Fleet
38
Q
R
S
Regularity of Operations
51
The Environment
52
Technical Maintenance
39
Cargo
40
Charters
42
Personnel Management and Training
56
Information Technology
43
Salary Policy
57
Projects for 2004
44
Social Development and Benefits
57
Training of CSA Employees
58
CSA Services at Prague-Ruzynû Airport
45
Air Crew Personnel
58
Passenger and Aircraft Handling
45
Studies for Professional Pilots
60
Duty Free
46
Catering
46
Ownership Interests
61
Subsidiary Companies of Czech Airlines
61
Operations Safety
47
Financial Section
65
T
U
Air Operator Certification
47
Flight Safety
47
Financial Statements for the Years Ended
Passenger Safety
48
31 December 2003 and 2002
Quality and Safety of Air and Ground Operations
48
Overview of Natural Outputs
Safety Training for Flight Crews
48
and the Aircraft Fleet Indicators
Quality and Safety of Aircraft Maintenance
49
The CSA Training Centre as a School of Engineering
50
65
86
Warsaw, Yerevan, Zagreb, Zürich, Amsterdam, Athens, Baku, Barcelona, Beirut, Belgrade, Berlin, Birmingham, Bologna, Bratislava, Brno, Brussels, Budapest, Bucharest, Cairo, Cologne, Colombo, Copenhagen, Cork, Dortmund, Dubai, Dublin, Düsseldorf,
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Selected Economic and Transport Indicators
Financial results in accordance with Czech Accounting Standards
Selected indicators and economic results
(CZK in thousands)
Transportation
2002
2003
17,311,606
19,195,831
Operating income
129,112
606,115
Pretax income (loss)
(64,993)
70,923
Passengers carried
Cargo carried (thousands of tonnes)
Turnover
Net income (loss)
1995
1996
1997
1998
1999
2000
2001
2002
2003
(millions)
264.4
268.7
285.4
288.3
311.6
360.9
388.3
407.6
498.1
Tonne kilometres available (millions)
461.3
479.1
501.2
507.7
550.7
587.9
625.3
639.8
770.3
Tonne kilometres utilized
(thousands) 1,488.3 1,612.1 1,733.7 1,801.8 2,064.1 2,461.7 2,877.3 3,065.0 3,591.5
(60,185)
70,600
Shareholders’ equity
1,563,165
1,754,368
Total Load Factor
10.6
10.0
10.4
11.9
13.0
16.6
16.2
17.9
21.1
Registered capital
2,735,510
2,735,510
weight
%
57.3
56.1
56.9
56.8
56.6
61.4
62.1
63.7
64.7
seat
%
66.6
66.0
66.8
66.3
65.8
70.4
70.8
71.3
72.7
Financial results in accordance
Employees and productivity
with International Financial Reporting Standards
(USD in thousands)
2002
2003
517,495
673,293
Operating income
40,414
27,977
Pretax income
26,205
16,090
Turnover
Net income
Shareholders’ equity
Registered capital
14,645
19,498
170,808
191,308
99,509
99,509
Employees and productivity
1995
1996
1997
1998
1999
2000
2001
2002
2003
Number of employees
3,916
3,976
3,912
3,795
3,876
3,990
4,422
4,455
4,543
Tonne kilometres
utilized/employee
(thousands)
67.53
67.59
72.95
75.96
80.39
90.44
87.82
91.48
109.63
Productivity
(revenues
from operating
activities/worker)
(CZK in millions)
1.9
2.0
2.3
2.6
2.9
3.4
3.3
3.1
3.4
Edinburgh, Ekaterinburg, Frankfurt, Gothenburg, Hamburg, Hannover, Helsinki, Istanbul, Karlovy Vary, Kiev, Kosice, Krakow, Kuwait, Larnaca, Ljubljana, London/Heathrow, London/Stansted, London/Gatwick, Luxembourg, Madrid, Manchester,
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CSA Shareholders
National Property Fund of the Czech Republic
National Property Fund of the Czech Republic (Endowment Fund shares)
âeská konsolidaãní agentura (Czech Consolidation Agency)
56.43%
0.49%
34.59%
âeská poji‰Èovna a.s.
4.33%
City of Prague
2.94%
City of Bratislava
0.98%
National Property Fund of the Slovak Republic
0.24%
Total
100.00%
Marseilles, Milan, Montreal, Moscow, Munich, New York/J. F. Kennedy, New York/Newark, Oslo, Ostrava, Paris, Riga, Rome, Samara, Sliac, Sofia, Split, St Petersburg, Stockholm, Stuttgart, Tallinn, Tatry/Poprad, Tel Aviv, Thessalonica, Toronto, Venice,
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Foreword
I am delighted to report that CSA coped successfully with the negative impacts these factors had on
demand for air transport and reacted flexibly to changes in the market environment. As a result, it was
able to keep to continuous year-on-year growth in transportation, as witnessed by production indicators
and the encouraging financial results of 2003.
Company operations in 2003 The Company’s main business activities in 2003 were scheduled
passenger and cargo transport, and charter transport. Non-transport activities contributing to the
Company’s financial situation and aimed primarily at boosting core business activities included catering
Dear friends,
services, the handling of goods, aircraft and passengers, and duty-free and in-flight sales. These activities
Czech Airlines entered its jubilee year 2003 vowing to remain a modern airline
were complemented by aircraft maintenance and flight simulator training.
while proudly proclaiming a tradition of 80 years in the air transportation business.
Revenues from sales of merchandise and services increased year on year by almost 12% to CZK 15.3 billion.
Operating within the global air transport market, CSA is exposed not only to
Transport revenues account for the largest share – more than 93% – of this indicator, rising by 12% on
general business risks, but is also liable to global external influences that are
the previous year. The decreased average rate of return caused by the USD exchange rate was effectively
compounded by specific risks characteristic of the air transport industry.
compensated by higher transport output. Revenues from charter and cargo transport, as well as from
other complementary activities, fell some way short of forecast levels. Positive exceptions were receipts
Global economic situation Aggregate statistical and economic data recorded by
from duty-free shops and in-flight sales.
European airlines in 2003 show quite clearly that the air transport industry has not
yet completely recovered from the tragic events of 11 September 2001, which
CSA posted an operating profit of CZK 606 million, which is almost a five-fold increase over 2002.
triggered the most profound air transport crisis in post-war history. We now know
Besides the above-mentioned revenues, the income reported by the Company was affected most by
that this crisis is not a temporary, but a deep-rooted structural problem. 2003 will
developments in the cost of aircraft fuel and navigational service fees.
enter the history of air transport as a year in which the trend of very sluggish
growth continued. The much needed dynamic recovery predicted for the sector
Financial and extraordinary items Developments in the exchange rates of world currencies had
was curbed by a wide range of adverse worldwide economic and geopolitical
a palpable impact on the Company’s balance sheet. The revaluation of assets and liabilities as at
factors. Key factors preventing an upswing were the fear of war in Iraq, the
31 December 2003 had a profound influence on the overall financial result, as the loss from exchange-rate
ensuing military conflict itself, the outbreak of the SARS epidemic, the constant
differences was more than CZK 300 million. Accounting for airport taxes also had an impact on the
threat of terrorist attack and global economic stagnation.
final result.
Vienna, Vilnius, Warsaw, Yerevan, Zagreb, Zürich, Amsterdam, Athens, Baku, Barcelona, Beirut, Belgrade, Berlin, Birmingham, Bologna, Bratislava, Brno, Brussels, Budapest, Bucharest, Cairo, Cologne, Colombo, Copenhagen, Cork, Dortmund, Dubai,
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Capital expenditure in 2003 focused primarily on improving operating conditions.
The launch of customer-oriented projects, as well as schemes to analyse customer needs in individual market
The most prominent project was the completion of the cargo terminal, costing
segments and elevate the “convenience and quality of in-flight services”, which are among CSA’s principal
more than CZK 620 million. Sizeable resources were also invested into the
values, is proof that marketing and sales are acknowledged as key processes within the Company. By setting
development of information systems and technologies.
up product analysis and introducing effective marketing, we have set ourselves the goal of increasing the
standard of services for Business Class passengers and of maintaining the level in Economy Class.
The registered capital as at 31 December 2003 remained unchanged from 2002 at
Another of the CSA management’s priorities is to cultivate sound partnership relations with employees by
CZK 2.736 billion.
concluding a long-term collective agreement.
All the figures disclosed above are based on Czech Accounting Standards and the
management’s view of the results achieved.
New steps have been taken in 2004 aimed at making a more aggressive return to the charter market. By
restructuring the organizational structure and separating the fleet for nonscheduled transport we will be
Considering that satisfying the needs of our customers is of utmost importance, it
able to react flexibly to the needs of tour operators.
is gratifying for us that half a million more travellers used CSA’s services in 2003
than in 2002. The Company’s results and the policies used to achieve them are
We want to use our partnership and synergies within the SkyTeam Alliance to take full advantage of our
discussed in detail in this Annual Report.
exclusive position in the Alliance for the East European region by becoming a gateway to the East and
a bridge to the West.
Expectations for 2004
A Company Strategy has been formulated for the
2004 – 2014 period. This strategy stands on two fundamental pillars: internal
CSA aspires to be a modern, dynamically developing company, an aircarrier with optimized costs,
optimization with the aim of increasing the Company’s productivity and of
working hard to exploit business opportunities in the industry.
reducing unit costs, and external expansion based on our ambition of gaining
a larger share of the air transport market. If CSA is to remain competitive and keep
I would like to end by thanking all the shareholders for their general support, our clients for their trust, our
hold of the market share it enjoys at the Company’s home airport in Prague, it
employees for their solid efforts and all our business partners for their affable and fair business relations.
needs to enlarge and renovate its aircraft fleet. There will be unprecedented
growth in the Company’s transport capacity in 2004.
The new strategy described above is our answer to market liberalization,
to ever sharper competition from budget airlines and to new business
opportunities connected with the Czech Republic’s accession to the
Jaroslav Tvrdík
European Union.
Chairman of the Board of Directors and President of Czech Airlines
Dublin, Düsseldorf, Edinburgh, Ekaterinburg, Frankfurt, Gothenburg, Hamburg, Hannover, Helsinki, Istanbul, Karlovy Vary, Kiev, Kosice, Krakow, Kuwait, Larnaca, Ljubljana, London/Heathrow, London/Stansted, London/Gatwick, Luxembourg, Madrid,
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Company Governing Bodies and Management
Jaroslav Tvrdík
Chairman of the Board of Directors
President
Katefiina Hobzová Chalupová
Deputy Chairwoman of the Board of Directors
Executive Director, Information Technology Division
TomበHeczko
Member of the Board of Directors
Vice-President, Technical Division
Peter Jusko
Member of the Board of Directors
Vice-President, Flight Operations
Jaroslav ·vábík
Member of the Board of Directors
Vice-President, Human Resources
Petr JÛza
Member of the Board of Directors
Vice-President, Finance Division
Jifií Pos
Deputy Chairman of the Supervisory Board
Vice-President, Ground Operations
Zuzana ¤ezníãková
Member of the Board of Directors
Vice-President, Marketing and Sales Division
Jan VáÀa
Executive Director, Strategic Planning and Development
Manchester, Marseilles, Milan, Montreal, Moscow, Munich, New York/J. F. Kennedy, New York/Newark, Oslo, Ostrava, Paris, Riga, Rome, Samara, Sliac, Sofia, Split, St Petersburg, Stockholm, Stuttgart, Tallinn, Tatry/Poprad, Tel Aviv, Thessalonica,
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Board of Directors
Jaroslav Tvrdík – Chairman of the Board of Directors since 2 September 2003
Peter Jusko – member of the Board of Directors since 2 September 2003
Graduated in Military Economics from Vy‰kov Military College. During the 1990s he worked for
Graduated in Civil Aircraft Application and Navigation Technology at the Kiev Institute of Civil
the Economic Department within the Foreign Affairs Section of the Ministry of Defence of the
Aviation Engineering, and subsequently completed the Sheffield Hallan University MBA
Czech Republic, initially as a Senior Officer, then as Office Manager. In 1992-1993, he was the
programme at the Czech Technical University, Prague. In 2004, he studied IATA Airline
Chief of Financial Services for the First Battalion of the UN Peace Force in the former Yugoslavia.
Business Foundations at the Aviation Training and Development Institute in Geneva. He has
He was later appointed Director of the Economics Department within the Foreign Affairs Section
worked for CSA since 1987. He began as an onboard engineer, then became the second pilot
of the Principal Internal Management Office of the Ministry of Defence, and director of the
for TU 134, L 410, and B737 aircraft, and was ultimately made captain of ATRs and B737s. As
contributory organization Military Spa and Recreational Facilities. At the end of 2000 and the
the Vice-President for Flight Operations, he is also responsible for the management and
beginning of 2001, he was the Deputy Defence Minister for Economics, and on 4 May 2001 he
monitoring of flight operations, and for flight crews and their training.
was appointed the Czech Minister of Defence. A year later, he also became a member of the
Deputy of Chambers, which is the lower chamber of the Czech Parliament.
Jaroslav ·vábík – member of the Board of Directors since 2 September 2003
Graduated from the Faculty of Law, Charles University, Prague. Between 1995 and 2001 he worked
Katefiina Hobzová Chalupová
at the Czech Ministry of Defence as the executive director of the Defence Policy Section, the executive
Vice-Chairwoman of the Board of Directors since 29 March 2004
director of the Legislative and Legal Affairs Section, and executive director of the Inspectorate of the
member of the Board of Directors since 18 December 2003
Ministry of Defence. Prior to his appointment as CSA Vice-President for Human Resources, he was
Graduated from the Faculty of Mathematics and Physics, Charles University, Prague. In 1986
Deputy Defence Minister and Manager of the Office of the Czech Ministry of Defence, where he was
she started out as a specialist analyst, and went on to become the Head of IT at the Ministry of
primarily responsible for the ministry’s legislative activities and for the governmental and
Health of the Czech Republic. During her professional career, she has held several executive
parliamentary agenda. From 1997 to 2003, he was the Defence Ministry’s representative in the
and managerial positions in the field of information technology, e.g. at the multinational
Supervisory Board, and subsequently in the Board of Directors, of Vojenská zdravotní poji‰Èovna âR.
software corporation Informix and as an independent IT management consultant at Oracle.
TomበHeczko – member of the Board of Directors since 2 September 2003
Graduated from Bílovec Grammar School of Mathematics and Physics, before studying at the
Faculty of Mechanical Engineering, Czech Technical University, Prague. As part of his postgraduate
project, he spent 1992 at the Faculty of Aerospace Engineering, Glasgow University. He joined CSA
in 1993 as a marketing engineer in the Technical Section, where he was Head of Technical
Maintenance Marketing and Sales until 1999. He contributed to CSA’s dynamic development of
aircraft maintenance services for external customers. Since 1999, he has been a member of the
AEA Technical and Operations Committee and a member of the Supervisory Board of the Czech
Aircraft Manufacturers Association. In 2001, he became a member of the Purchasing Steering
Committee and the Maintenance Executives Committee within the SkyTeam aviation alliance.
List of members of the company’s Board of Directors whose tenure began in 2004:
Zuzana ¤ezníãková – Member from 28 January 2004
Petr JÛza – Member from 28 January 2004
List of former members of the company’s Board of Directors whose tenure ended in 2003:
Franti‰ek BroÏík – Member until 28 February 2003
Miroslav KÛla – Chairman until 2 September 2003
Jifií KaÀák – Member until 2 September 2003
Vladimír Karásek – Member until 2 September 2003
Jifií Navrátil – Member until 2 September 2003
Josef Tureck˘ – Member until 2 September 2003
TomበLíbal – Member until 2 September 2003
Václav Král – Member from 2 September 2003 to 5 November 2003
Kamil Slavík – Member from 2 September 2003 to 10 December 2003
Franti‰ek Slab˘ – Member until 11 October 2003
Toronto, Venice, Vienna, Vilnius, Warsaw, Yerevan, Zagreb, Zürich, Amsterdam, Athens, Baku, Barcelona, Beirut, Belgrade, Berlin, Birmingham, Bologna, Bratislava, Brno, Brussels, Budapest, Bucharest, Cairo, Cologne, Colombo, Copenhagen, Cork,
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Supervisory Board
Eduard Janota – Chairman of the Supervisory Board since 9 April 2003
the Czech Republic. In 2002, he was appointed the Mayor of Prague. He is the Chairman of the
Graduated from the Faculty of Production Economics and then, as a postgraduate, from the
Prague Spring Board, a member of the Academic Council of the First Medical Faculty, a member
Financial Studies Department of the University of Economics, Prague. Since 1979, he has
of the Board ofCharles University, Prague, a member of the Czech Association of Regions, and
worked for the National Budget Division of the Ministry of Finance of the Czech Republic; he is
the honorary chairman of the Board of the Czech Municipalities Association; he is also a member
currently the First Deputy Minister of Finance. He is a member of the Supervisory Board of
of the Supervisory Boards of PODANÁ RUKA, o.p.s. and the Václav Klaus Endowment Fund. In
âeskomoravská záruãní a rozvojová banka, a.s.
June 2004, he was appointed the Chairman of the European Union Committee of the Regions.
Jifií Pos – Vice-Chairman of the Supervisory Board since 21 May 2003
Zlata Gröningerová – member of the Supervisory Board since 9 April 2003
Graduated in Aircraft Technology from the Faculty of Mechanical Engineering, Czech Technical
Graduated from the University of Economics, Prague. Until March 2004, she was a member of the
University, Prague. He has worked for âSA since 1986. He started his career with the company
Board of Directors of the Czech Consolidation Agency, where she was the Executive Director of
in the operations section, before moving on to the sales section as the head of area price
Specialist Trade. Until April 2004, she was the Chairwoman of the Supervisory Board of Konpo, s.r.o.
management and head of area route management. Between 1994 and 2001, he worked in
She is a member of the Board of Directors of PRISKO a.s., Chairwoman of the Supervisory Board of
marketing and sales as the director responsible for Asia, which required him to be based in
Revitalizaãní agentura, a.s. v likvidaci, Chairwoman of the Supervisory Board of âKD PRAHA DIZ, a.s.,
Bangkok. In June 2001, he returned to the operations section as the head of operations
and a member of the Supervisory Board of âeská spofiitelna, a.s.
management and handling agreements. He is currently Vice-President for Operations.
Du‰an Horák – member of the Supervisory Board since 11 December 2002
Jan Adam – member of the Supervisory Board since 9 April 2003
Graduated from the Ko‰ice Military College of Aviation. After completing his studies, he was
Graduated from the Faculty of Civil Engineering, Brno, Technical University. Since March 2003
a professional soldier until 1986. He joined CSA in 1997, first as a pilot and instructor, then as
he has worked for the Ministry of Transport of the Czech Republic, initially as adviser to the
second ATR pilot, second B737 pilot, and ATR captain; he is now a B737 captain.
Transport Minister and Head of Facility Management; in November 2003 he was appointed
Head of the Privatization Department.
Zdenûk Hrub˘ – member of the Supervisory Board since 9 April 2003
Graduated in Cybernetics from the Faculty of Electrical Engineering, Czech Technical University,
Pavel Bém – member of the Supervisory Board since 25 June 2003
Prague, with postgraduate studies in economics. He is currently Deputy Minister of Finance. He is
Graduated from the Faculty of General Medicine, Charles University, Prague, and completed
the Vice-President of the Presidium of the National Property Fund of the Czech Republic, a member
postgraduate studies in psychiatry at the Institute for the Further Education of Physicians and
of the Board of Directors of Sokolovská uhelná, a. s., Vice-Chairman of the Supervisory Board of
Pharmacists. In 1992, he studied a postgraduate course at John Hopkins University, School of
âESK¯ TELECOM, a.s., and Vice-Chairman of the Supervisory Board of âEZ, a. s. Since December
Public Health, Hubert H. Humphrey Fellowship on Substance Abuse, Baltimore, USA. Since 1995,
2003, he has been a member of the Board of Trustees of the Rainbow Energy Foundation; since
he has worked for the International Anti-Drugs Commission of the Czech Government; he is
April 2004 he has been a member of the Supervisory Board of Eurotel Praha, spol. s r.o.
currently a ministerial adviser specializing in the anti-drugs policy of the Ministry of the Interior of
Dortmund, Dubai, Dublin, Düsseldorf, Edinburgh, Ekaterinburg, Frankfurt, Gothenburg, Hamburg, Hannover, Helsinki, Istanbul, Karlovy Vary, Kiev, Kosice, Krakow, Kuwait, Larnaca, Ljubljana, London/Heathrow, London/Stansted, London/Gatwick,
F
13
Jaroslav Lorenc – member of the Supervisory Board since 8 April 2003
Pavel Such˘ – member of the Supervisory Board since 25 June 2003
Graduated in Aviation Mechanical Engineering from Secondary Mechanical Engineering
Graduated in Economic Information and Control from the University of Economics, Prague. Since
College. He joined CSA in 1968. He has been the Chief Aircraft Maintenance (UDL/ULRE)
1994, he has been a member of the Executive Committee of the National Property Fund of the
Supervisor at CSA since 1994.
Czech Republic; in November 2002, he was appointed the Committee’s First Vice-Chairman. He is
a member of the Supervisory Boards of UNIPETROL, a.s., Konpo, s.r.o., and âEZ, a. s. He resigned
Libor Luká‰ek – member of the Supervisory Board since 25 June 2003
from the Supervisory Board of Jihomoravská energetika, a.s. in February 2003. Until June 2003, he
Graduated from the Faculty of Law and Teaching, Masaryk University, Brno, and the University
was a member of the Board of Directors of AERO HOLDING a.s. v likvidaci.
of Economics, Prague. Since 2002, he has been a member of the Executive Committee of the
National Property Fund of the Czech Republic and the head of the Capital Interest Management
Executive management
Section. He is the Vice-Chairman of the Board of Directors of MERO âR, a.s., and a member of
Jaroslav Tvrdík – President from 3 September 2003
the Board of Directors of Severomoravská energetika, a. s.
TomበHeczko – Vice-President, Technical Division from 13 September 2003
Katefiina Hobzová Chalupová – Executive Director, Information Technology Division
Hana Pe‰ková – member of the Supervisory Board since 8 April 2003
from 10 December 2003
Graduated from the Faculty of Teaching, Charles University, Prague. On completing her studies,
Peter Jusko – Vice-President, Flight Operations from 1 July 2002
she joined CSA in 1977 as a flight guide. She is currently Manager of the Flight Guide Unit; she
Petr JÛza – Vice-President, Finance Division from 10 March 2004
is also a CC operations instructor, ground operations instructor, and CC operations examiner.
Jifií Pos – Vice-President, Ground Operations from 1 October 2002
Zuzana ¤ezníãková – Vice-President, Marketing and Sales Division from 1 March 2004
Pavel ¤eÏábek – member of the Supervisory Board since 9 April 2003
Jaroslav ·vábík – Vice-President, Human Resources from 3 September 2003
Graduated in Economic and Mathematical Calculations from the Faculty of Business Management,
Jan VáÀa – Executive Director, Strategic Planning and Development from 10 December 2003
University of Economics, Prague. Since 2001, he has been the Chief Executive Officer of the Czech
Consolidation Agency. In 2003, he resigned from the Supervisory Board of PRISKO a.s. Until
February 2004, he was Chairman of the Supervisory Board of PâRB s.r.o. – Moscow, and until May
2004 he was a member of the Supervisory Board of Konpo, s.r.o. In March 2004, he resigned from
his position as Chairman of the Board of Directors of the Czech Consolidation Agency.
List of former members of the company’s Supervisory Board whose tenure ended in 2003:
Pavel Trenda – Chairman until 8 April 2003
Daniela Kovalãíková – Deputy Chairwoman until 8 April 2003
Ivan Folt˘n – Member until 8 April 2003
Ivana Frauenterková – Member until 8 April 2003
Filip Drapák – Member from 9 April 2003 until 24 June 2003
Martin Engel – Member from 9 April 2003 until 24 June 2003
Jifií Jurán – Member from 9 April 2003 until 24 June 2003
List of former members of the company’s Executive Management
whose tenure ended in 2003 or by the Annual Report closing date:
Miroslav KÛla – President until September 2003
NadûÏda Navrátilová – Chief Accountant until October 2003
Jifií Veigert – Executive Director, Property Participation and Administration Division until November 2003
Franti‰ek Bis – Secretary General until November 2003
Antonín Karásek – Inspector General until October 2003
Bohumil Bartu‰ek – Director, Information Technologies until October 2003
Franti‰ek Slab˘ – Vice-President, Finance and Planning until October 2003
Václav Král – Vice-President, Marketing and Sales until November 2003
Michal Kraus – Vice-President, Human Resources until September 2003
Michal PoÏár – authorized to manage the Marketing and Sales Division from 1 November 2003 until 8 March 2004
Radek ·nábl – authorized to manage the Economic Division from 6 November 2003 until 29 January 2004
Luxembourg, Madrid, Manchester, Marseilles, Milan, Montreal, Moscow, Munich, New York/J. F. Kennedy, New York/Newark, Oslo, Ostrava, Paris, Riga, Rome, Samara, Sliac, Sofia, Split, St Petersburg, Stockholm, Stuttgart, Tallinn, Tatry/Poprad, Tel Aviv,
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14
Company Organization Chart
as at 31 December 2003
Company President
Jaroslav Tvrdík
President’s Office
KPR
Operations Quality System
SJP
Information Technologies Division
ÚIT
Legal Affairs
PV
Katefiina Hobzová Chalupová
Executive Director
V¤-IT
Alliances
ALI
Public Relations
VVZ
V¤-IT Secretariat
SIT
ÚIT Finance and Investment
EIT
Information Systems Development
RIS
Airline Systems
AST
Information Technology Development
RIN
Computer Network and PC Operations
PRV
Communications
SPO
Strategic Planning
and Development Division
ÚSP
Finance Division
EÚ
Jan VáÀa
Executive Director
V¤-SP
Radek ·nábl
Acting Manager of
the Economic Division
VP-EK
V¤-SP Secretariat
SSP
Office of the VP-EK
KEK
Equity Investments
MTÚ
Planning
PL
Strategic Planning and Analysis
SPA
Financing
FIN
Strategic Development
SRO
Taxes
DAN
Corporate Organization
ORG
Long-Term Financing
DF
Security
SEC
Internal Audit
VAD
Passport and Visa Control
KPV
General Accounting Office
ÚâT
Information Security
OCH
Revenue Accounting
KPT
Thessalonica, Toronto, Venice, Vienna, Vilnius, Warsaw, Yerevan, Zagreb, Zürich, Amsterdam, Athens, Baku, Barcelona, Beirut, Belgrade, Berlin, Birmingham, Bologna, Bratislava, Brno, Brussels, Budapest, Bucharest, Cairo, Cologne, Colombo,
G
15
Marketing and Sales Division
ÚMP
Human Resources Division
PSÚ
Technical Division
TÚ
Flight Operations Division
LÚ
Ground Operations Division
PZÚ
Michal PoÏár
Acting Manager of
the Marketing and Sales Division
VP-MP
Jaroslav ·vábík
Vice-President
VP-PS
TomበHeczko
Vice-President
VP-TE
Peter Jusko
Vice-President
VP-LP
Jifií Pos
Vice-President
VP-PZ
Office of the VP-PS
KPS
Office of the VP-TE
KTE
Office of the VP-LP
KLP
Office of the VP-PZ
KPZ
PSÚ Finance
EPS
TÚ Finance
ETE
LÚ Finance
ELP
PZÚ Finance and Administration
EPZ
Human and Payroll Policy
PMP
Quality Assurance and Control
ZJK
Flight Safety Inspection
IBL
Ground Operations Control
and Handling Agreements
¤PR
Social Development and Services
SOR
Aircraft Engineering
TL
Air Crew
FC
Payroll Office
MÚ
Production Planning and Control
¤TP
Cabin Crew
CC
Training Centre
VST
Material Procurement and Logistic
ZAS
Aviation Regulations and Standards
LPS
Aircraft Maintenance
ÚDL
Flight Operations Systems
LSY
Marketing Programs
MAP
Aircraft Components and Ground
Support Equipment Maintenance
ÚLCP
Air Crew Training
VPL
Service Standards and Quality
SKS
TÚ Development
RTE
Cargo
CAR
Investment and Management
IVS
Office of the VP-MP
KMP
ÚMP Finance
EMP
Sales – International
OBZ
Sales – Czech Republic
OâR
International Relations
SMO
Network Management
NMG
Reservation and Distribution Systems
RDS
Central Dispatch
CED
Passenger Services
ODC
Ramp Handling Services
RHS
Catering
CTG
Duty Free
DFR
Quality Assurace Air Crew System
SJV
Flight Control and Security
RZL
Charters
CHT
External Communications
KOM
Copenhagen, Cork, Dortmund, Dubai, Dublin, Düsseldorf, Edinburgh, Ekaterinburg, Frankfurt, Gothenburg, Hamburg, Hannover, Helsinki, Istanbul, Karlovy Vary, Kiev, Kosice, Krakow, Kuwait, Larnaca, Ljubljana, London/Heathrow, London/Stansted,
London/Gatwick, Luxembourg, Madrid, Manchester, Marseilles, Milan, Montreal, Moscow, Munich, New York/J. F. Kennedy, New York/Newark, Oslo, Ostrava, Paris, Riga, Rome, Samara, Sliac, Sofia, Split, St Petersburg, Stockholm, Stuttgart, Tallinn,
In 1924, new aircraft were ordered for CSA at the Third International Aviation Technology Exposition in Prague. One of these was
the German Farman Goliath F-60. The Goliath was CSA’s first twin-engine, large-capacity aircraft, with a capacity of twelve passengers.
Tatry/Poprad, Tel Aviv, Thessalonica, Toronto, Venice, Vienna, Vilnius, Warsaw, Yerevan, Zagreb, Zürich, Amsterdam, Athens, Baku, Barcelona, Beirut, Belgrade, Berlin, Birmingham, Bologna, Bratislava, Brno, Brussels, Budapest, Bucharest, Cairo,
H
18
Transport Results
In 2003, CSA offered scheduled flights to 66 destinations in 40 countries
Compared with 2002, the network expanded to include scheduled flight connections to Edinburgh, Cork,
throughout Europe, Asia, North America, the Middle and Far East, and
Tallinn, Yerevan and Sliaã. Through our cooperation with other airlines, we extended the range of weekly
Africa.
frequencies and times to European cities and, based on our association with SkyTeam, we were able to
expand the services we offer to other regions all over the world.
Flights on scheduled international routes carried 3,294,800 passengers, which translates into a year-on-year
increase of 19.5%. Charter flights carried some 244,000 passengers and domestic flights 52,700
passengers (a 9.8% increase). The largest proportion of travellers carried by CSA was on scheduled
European flights, which reported a share of 88.2%, compared with 6.3% for services to and from North
America and 5.5% for flights to the Middle and Far East. In all, CSA carried 3,591,000 passengers and
21,092 tonnes of freight and mail.
The transportation performance indicator of available passenger kilometres climbed by 19.3% year on year.
More than 54,517,000 kilometres were covered over 88,700 net flight hours. There were 54,758 take-offs
and 27,022 flights. The load factor increased to 72.7%, up from 71.3% in 2002.
Daily aircraft use improved slightly. On average, aircraft were used 8.46 hours per day. By type of aircraft,
the A310 spent most time in operation (averaging 13.22 hours a day).
Number of passengers carried on CSA flights, 1996 – 2003
Number of flights on CSA routes, 1996 – 2003
4,000,000
30,000
3,000,000
20,000
2,000,000
10,000
1,000,000
0
1996
1997
1998
1999
2000
2001
2002
2003
0
1996
1997
1998
1999
2000
2001
2002
2003
Cologne, Colombo, Copenhagen, Cork, Dortmund, Dubai, Dublin, Düsseldorf, Edinburgh, Ekaterinburg, Frankfurt, Gothenburg, Hamburg, Hannover, Helsinki, Istanbul, Karlovy Vary, Kiev, Kosice, Krakow, Kuwait, Larnaca, Ljubljana, London/Heathrow,
I
19
Destinations
North America
Direct flights:
New York, Montreal, Toronto
Code-share agreement with AeroMexico:
Mexico City
Code-share agreement with Delta Air Lines:
Atlanta, Cincinnati, Dallas, Detroit, Chicago, Los Angeles, Nashville, Philadelphia, Phoenix, Pittsburgh,
Salt Lake City, San Francisco, Seattle, St. Louis, Washington
Europe
Direct flights:
Amsterdam, Athens, Barcelona, Belgrade, Venice, Berlin, Birmingham, Bologna, Bratislava, Brno, Brussels,
Budapest, Bucharest, Cologne/Bonn, Copenhagen, Cork, Dublin, Düsseldorf, Edinburgh, Frankfurt,
Gothenburg, Hamburg, Hannover, Helsinki, Istanbul, Karlovy Vary, Ko‰ice, Kiev, Larnaca, London,
Ljubljana, Madrid, Manchester, Milan, Munich, Moscow, Oslo, Ostrava, Paris, Riga, Rome, Sliaã, Sofia,
Thessalonica, Split, St Petersburg, Stockholm, Stuttgart, Tallinn, Tatry/Poprad, Warsaw, Vienna, Vilnius,
Yerevan, Zagreb, Zürich
Code-share agreement with Air France:
Bordeaux, Lyon, Marseilles, Nice, Strasbourg, Toulouse
Code-share agreement with AirZena Georgian Airlines:
Tbilisi
Code-share agreement with Air Malta:
Malta
Middle and Far East and North Africa
Abu Dhabi, Al Ain, Beirut, Dubai, Cairo, Colombo, Kuwait, Tel Aviv
London/Stansted, London/Gatwick, Luxembourg, Madrid, Manchester, Marseilles, Milan, Montreal, Moscow, Munich, New York/J. F. Kennedy, New York/Newark, Oslo, Ostrava, Paris, Riga, Rome, Samara, Sliac, Sofia, Split, St Petersburg, Stockholm,
J
20
CSA’s Financial Results
In the history of air transportation, 2003 will go down as a year of continuing
In 2003, the forecast and much needed robust recovery was hindered by a number of adverse worldwide
sluggish growth in the industry. Nevertheless, this fact was not reflected in
economic and geopolitical factors. Key factors preventing an upswing were the fear of war in Iraq, the
CSA’s financial result.
ensuing military conflict itself, the outbreak of the SARS epidemic, the latent threat of terrorist attack and
global economic stagnation. The low profit margins of airline companies and the considerable losses they
reported were compounded by the ongoing market penetration of low-cost carriers, flooding the market
with budget-priced air tickets for flights within Europe, the constantly dwindling number of business class
passengers, and the high outlay required for tighter security and antiterrorist measures.
CSA stood up well to the negative impacts that that these factors had on demand for air transportation,
and responded flexibly to the changes in the market environment. As a result, the Company was able to
keep to its established trend of year-on-year growth in the transportation segment as evidenced not only
by production indicators, but also by the encouraging financial results for 2003. After suffering two years
of losses, as measured by Czech Accounting Standards, in 2003 CSA posted a profit of CZK 70.6 million.
The profit of USD 19.5 million calculated under IFRS (International Financial Reporting Standards) is
further proof that CSA’s financial situation has been steadily improving from the beginning of the airline
industry crisis.
Earnings
After-tax profit (USD in millions), according to IFRS
After-tax profit (CZK in millions), according to CAS
20
500
15
250
10
0
5
-250
0
1998
1999
2000
2001
2002
2003
-500
1998
1999
2000
2001
2002
2003
Stuttgart, Tallinn, Tatry/Poprad, Tel Aviv, Thessalonica, Toronto, Venice, Vienna, Vilnius, Warsaw, Yerevan, Zagreb, Zürich, Amsterdam, Athens, Baku, Barcelona, Beirut, Belgrade, Berlin, Birmingham, Bologna, Bratislava, Brno, Brussels, Budapest,
K
21
Commercial and Marketing Strategy
The first few months in the year marking the 80th anniversary of the
Passenger Transport Despite the adverse economic and geopolitical circumstances described
Company’s foundation cast a particularly long shadow over air transportation.
above, CSA managed to keep to its trend of positive year-on-year growth in the number of
During the spring of 2003, the prospect and subsequent reality of military
passengers. In comparison with 2002, the number of passengers carried rose by 17.1%. Another
conflict in Iraq, combined with the influence of other global factors, severely
buoyant area is the seat occupancy rate, which climbed year on year from 71.3% to 72.7% and was in
complicated the operations of many air carriers. CSA navigated its way
line with the averages for air carriers in the Association of European Airlines (AEA). The Company’s share
through the market fluctuations without suffering much damage, and the
of scheduled flights to and from the Czech Republic was 56.1% in 2003, compared to 56.8% in 2002.
final results posted in 2003 give us grounds for optimism. This situation
This figure reflects the fact that CSA had to grapple with the expansion of low-cost carriers to Prague.
proves that the core aspects of CSA’s commercial and marketing strategy
Prague-Ruzynû Airport profiled as an increasingly important European transfer hub in 2003. The share of
form a sound basis for the Company’s market operations in the future.
transfer passengers on CSA flights came to 37%, which in practice means that more than a third of all
CSA passengers used Prague as a transfer point.
Expansion of low-cost carriers In 2003, Prague became the most frequented destination for low-cost
carriers in Central and Eastern Europe. The main destinations were airports in the United Kingdom,
especially London – Stansted, Bristol, Newcastle, Southampton, East Midlands, and Manchester – as well
as Cologne, Stuttgart, Oslo and Stockholm.
Charters Charter flights are the responsibility of Czech Airlines’ marketing and sales division. CSA offers
charter services as a separate product and has set aside three Boeing 737-400 aircraft for the charter service.
During 2003, the Company’s charter flights served 243,992 passengers.
CSA share in scheduled flights to/from Prague
passengers checked in at Prague-Ruzynû Airport
CSA share
1999
2000
2001
2002
2003
50.3%
52.8%
55.4%
56.8%
56.1%
Bucharest, Cairo, Cologne, Colombo, Copenhagen, Cork, Dortmund, Dubai, Dublin, Düsseldorf, Edinburgh, Ekaterinburg, Frankfurt, Gothenburg, Hamburg, Hannover, Helsinki, Istanbul, Karlovy Vary, Kiev, Kosice, Krakow, Kuwait, Larnaca, Ljubljana,
London/Heathrow, London/Stansted, London/Gatwick, Luxembourg, Madrid, Manchester, Marseilles, Milan, Montreal, Moscow, Munich, New York/J. F. Kennedy, New York/Newark, Oslo, Ostrava, Paris, Riga, Rome, Samara, Sliac, Sofia, Split,
In 1937, flight attendants first appeared on board CSA aircraft. Passengers were able to order in-flight refreshments in advance, which
they received at the airport prior to boarding. CSA flew to twelve foreign destinations, including Brussels, Venice, Trieste, Rome,
Strasbourg, Budapest, and Moscow.
St Petersburg, Stockholm, Stuttgart, Tallinn, Tatry/Poprad, Tel Aviv, Thessalonica, Toronto, Venice, Vienna, Vilnius, Warsaw, Yerevan, Zagreb, Zürich, Amsterdam, Athens, Baku, Barcelona, Beirut, Belgrade, Berlin, Birmingham, Bologna, Bratislava, Brno,
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24
Flight Schedule
Expanded by an additional four aircraft, the CSA fleet comprised 31 aircraft
In addition to new destinations, in the 2003 summer season connections between Prague and other
in 2003. For medium-haul flights, the fleet grew by three Boeings – two
existing destinations were bolstered: a third daily flight to Budapest was added, and flights to Paris were
737-500s and one 737-400.
increased from three to four per day (making a total of seven in cooperation with Air France). Besides the
existing noon flight to Madrid, a new evening flight was added, returning from the Spanish capital in the
The fleet of long-distance aircraft was expanded this year for the first time since
morning, thus offering new options to business and transfer passengers. Due to low traffic on flights to
1991 as CSA purchased an extra Airbus 310-300 to complement the two already
Amsterdam, this route was reduced from four to three daily flights, and therefore CSA is now offering
in operation. It is worth noting fleet expansion prior to 2003 had been prevented
five flights a day in cooperation with KLM.
by the situation following the September 11 terrorist attacks and the floods which
hit the Czech Republic in the following year. The acquisition of new aircraft after
Thanks to the fleet expansion in 2003, Czech Airlines managed to foster conditions conducive to a steady
a one-year hiatus is another positive sign that CSA’s economic situation is improving.
rate of growth in carrying capacity, establishing a very solid springboard for continued growth in 2004.
Fleet expansion enabled CSA to introduce four new routes: five Boeing 737 flights
a week to Tallinn, Estonia, as of summer 2003; five Boeing 737 flights a week to
Flight Network Expansion in 2004 In 2004, the fleet is projected to increase by eight aircraft,
Edinburgh as of 13 April 2003; four flights a week to Cork, the Company’s second
which will be the largest expansion in the modern-day history of the Company.
destination in Ireland; and lastly, as of the beginning of July 2003, a third
destination in Slovakia, Sliaã/Banská Bystrica, operated five times per week with an
Under a decision of the CSA Supervisory Board, an entire generation of ATR turboprop aircraft will be
ATR 42. All the new routes proved their worth in this first year of operation and
replaced by the new generation of ATR 42-500s. Replacement will begin this year, when the Company
met their targets. In this light, CSA has plans to expand operations to these
plans to operate three aircraft of this new type. Passengers will enjoy a higher standard of comfort, lower
destinations in 2004.
noise levels during the flight and higher cruising speeds. The passenger cabin will be fitted with leather
seats in a modern and colourful design. The family of medium-haul aircraft will be extended by two
In addition to the routes discussed above, a year-round service to Colombo,
Boeing 737-500s and three Boeing 737-400s. The last addition to the fleet will be a long-haul
Sri Lanka, was launched. In terms of long-haul flights, in the summer of 2003 CSA
Airbus 310-300. This programme will see the total number of aircraft operated by CSA rise from 35 to 43.
returned to Newark, the second-largest airport in New York, following the
acquisition of its third A310. Flights to this destination had been suspended after
the attacks of 11 September 2001.
Brussels, Budapest, Bucharest, Cairo, Cologne, Colombo, Copenhagen, Cork, Dortmund, Dubai, Dublin, Düsseldorf, Edinburgh, Ekaterinburg, Frankfurt, Gothenburg, Hamburg, Hannover, Helsinki, Istanbul, Karlovy Vary, Kiev, Kosice, Krakow, Kuwait,
L
The new aircraft will enable the Company to commence operations on new routes
25
Number and structure of carried passengers
to Krakow (Poland), Dortmund (Germany), Luxembourg, Baku (Azerbaijan), and
Marseilles (France). Operations to the Russian Federation will expand radically.
Besides the existing routes to Moscow and St Petersburg, two more destinations
will be added to the network: the third-largest Russian city, Ekaterinburg, and an
Region
Number of passengers Total proportion (in %)
North America
206,307
Far East
Middle East, Africa
important industrial centre, Samara. During the 2004 – 2005 winter season, CSA
Western Europe
plans to introduce a new destination, Male, in the Maldives, as an extension of the
Central and Eastern Europe
route to Colombo, which will be served by an Airbus 310-300.
Scheduled international flights total
Domestic flights
Besides the new destinations and minor changes in individual flights to several
existing destinations, such as Dublin, Cork and London – Stansted, CSA has been
Scheduled flights total
Charters
CSA total
5.7
38,989
1.1
144,113
4.0
2,071,943
57.7
833,446
23.2
3,294,798
91.7
52, 675
1.5
3,347,473
93.2
243 992
6.8
3,591,465
100.0
gearing up for a major increase in traffic on some routes. In this respect, the
Company will introduce a third daily flight to London – Heathrow and add
In 2002 and 2003, the highest numbers of passengers were transported to the following destinations
a second daily flight to Birmingham, Edinburgh and Manchester. An important
change is the transition to nighttime-only flights to Istanbul.
Destinations
Number of passengers in 2002
Destinations
Number of passengers in 2003
London
209,462
London (LHR + STN)
Amsterdam
178,797
Paris
181,931
Paris
165,326
Amsterdam
181,408
markets of most of the destinations it covers, but also to respond actively to the
Frankfurt
128,294
Frankfurt
138,922
changing situation in air transportation following the Czech Republic’s accession
New York (JFK)
108,444
New York (JFK + EWR)
131,743
to the European Union on 1 May 2004 and to exploit to the full the opportunities
Moscow
86,395
Moscow
108,843
emerging in this respect. CSA is therefore focusing Company growth on regions
Sofia
83,598
Madrid
100,301
Dublin
79,184
Sofia
Ko‰ice
72,393
Dublin
87,573
Madrid
66,577
Brussels
75,514
The aim of this expansion in 2004 is not only to maintain CSA’s position in the
where traffic has been administratively limited, such as Baltic states, Poland and
Hungary.
260,043
90,939
Number of CSA countries and destinations in 2003
Period
Winter 2002/2003
Countries served directly
Destinations served directly
Note
36
58
+ Colombo
+ Edinburgh, Cork, Sliaã, Yerevan, Tallinn
Summer 2003
40
66
Winter 2003/2004
38
64
Larnaca, Ljubljana, London/Heathrow, London/Stansted, London/Gatwick, Luxembourg, Madrid, Manchester, Marseilles, Milan, Montreal, Moscow, Munich, New York/J. F. Kennedy, New York/Newark, Oslo, Ostrava, Paris, Riga, Rome, Samara, Sliac,
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26
Cooperation with Other Airlines In 2003, cooperation between CSA
Cooperation with Alliance partners An important part of Alliance cooperation is the development of
and partner airlines continued to be an important commercial tool in
bilateral relations with the individual members of the SkyTeam Alliance. In 2003, CSA continued its
implementing CSA’s activities. The goal was to expand the services CSA
traditional code-share cooperation with Air France, Alitalia, AeroMexico and Delta Air Lines.
offers through a more convenient schedule, greater flight frequencies and
a higher number of destinations served.
In addition to code-share arrangements with Air France on the Prague – Paris/Lyons flights, CSA cooperates
with Air France on selected connecting Air France flights from Paris/Lyons to domestic destinations in
Cooperation with partner airlines enables the Company to provide better quality
France (Toulouse, Bordeaux, Strasbourg, Nice, and Marseilles) and from Prague to various other points,
airport and in-flight services, and also strengthens CSA’s position in the air travel
including Ostrava, Ko‰ice, Sliaã, Bratislava, Vilnius and Riga. Together with Alitalia, CSA offers four direct
market, leading to a better seat occupancy rate on CSA flights and therefore to
scheduled flights between Prague and Milan, Rome, Bologna and Venice.
the better financial results of individual CSA routes.
Code-share cooperation with Delta Air Lines continued in 2003 on the CSA Prague – New York flight,
and the existing code-share cooperation between CSA and Delta was extended to Delta flights from New
York to further points in the USA and for CSA connecting flights from Prague to selected destinations.
CSA continued code-share cooperation with AeroMexico on flights between Prague and Mexico City via
the shared transit points of Paris and New York. This enabled CSA to offer its passengers quality
connections under its own code.
Code-share cooperation between CSA and Korean Air is planned to begin in July 2004.
Sofia, Split, St Petersburg, Stockholm, Stuttgart, Tallinn, Tatry/Poprad, Tel Aviv, Thessalonica, Toronto, Venice, Vienna, Vilnius, Warsaw, Yerevan, Zagreb, Zürich, Amsterdam, Athens, Baku, Barcelona, Beirut, Belgrade, Berlin, Birmingham, Bologna,
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27
Cooperation with Other Airlines In addition to airlines within the SkyTeam
The introduction of cooperation with the Georgian carrier Airzena Georgian Airlines on the Prague – Tbilisi
Alliance, CSA cooperated bilaterally with other airline companies. The following
flight was also important. This is one-sided cooperation in a code-share free sale regime on Airzena
new agreements are of particular note:
routes. Starting 15 July 2003 two weekly flights have been offered under the OK code.
Effective from 15 January 2003, code-share cooperation began between CSA and
In July 2003, cooperation was launched with SkyEurope on the Ko‰ice – Prague flight, expanding the
the new Bulgarian air carrier Bulgaria Air on CSA Prague – Sofia flights. Cooperation
number of daily flights between the destinations from three to four and, at the same time, allowing for
on this route resulted in expanded sales and distribution opportunities for the CSA
the launch of roundtrip CSA flights from Prague to Sliaã/Banská Bystrica.
product on the Bulgarian market.
An important advance was the introduction of new reciprocal cooperation with Finnair on the Prague
Starting 1 June 2003, bilateral cooperation with Aeroflot began on the Prague
– Helsinki line (via Copenhagen) from December 2003, which has significantly improved connections
– Moscow flight, so CSA passengers can now take advantage of Aeroflot’s morning
between the two cities in the winter season, when both companies reduce the number of direct flights.
departures from Moscow. This cooperation has led to a significant improvement in
CSA services, especially for transit passengers continuing on CSA flights beyond
Code-share cooperation continued with Lufthansa on all Czech Airlines and Lufthansa flights between
Prague to destinations within the entire CSA network.
the Czech Republic and Germany. Thanks to this arrangement, CSA and Lufthansa offer daily connections
under their own codes and flight numbers between Prague and eight destinations in Germany (Munich,
JAT, a company working in bilateral cooperation with CSA on the basis of a BSA
Stuttgart, Düsseldorf, Frankfurt, Hamburg, Hanover, Cologne and Berlin).
contract (Blocked Space Agreement), began operating its third return flight on the
Belgrade – Prague route, and the number of flights on this route has been
Owing to continuing cooperation with other European carriers, during 2003 CSA was able to offer a quality
increased from five to six flights per week.
product on flights between Prague and important European destinations. Examples include cooperation
with KLM on Prague – Amsterdam flights, with SN Brussels Airlines on Prague – Brussels flights, with
Austrian Airlines on flights to and from Vienna, with Iberia on flights operated by CSA between Prague and
Madrid/Barcelona, with LOT on flights on the Prague – Warsaw route, with MALEV to/from Budapest,
with Croatia Airlines to/from Zagreb and Split, with Turkish Airlines on Prague – Istanbul flights, and with
AeroSvit Airlines on the Prague – Kiev route. Code-share cooperation between CSA and Air Malta was
resumed for the summer 2003 timetable.
Bratislava, Brno, Brussels, Budapest, Bucharest, Cairo, Cologne, Colombo, Copenhagen, Cork, Dortmund, Dubai, Dublin, Düsseldorf, Edinburgh, Ekaterinburg, Frankfurt, Gothenburg, Hamburg, Hannover, Helsinki, Istanbul, Karlovy Vary, Kiev, Kosice,
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CSA as a First-Rate Brand Name CSA entered 2003 vowing to remain
Positive perceptions of the Czech Airlines brand and the Company’s 80 th anniversary inspired its
a modern air carrier while proudly proclaiming its long-standing tradition
marketing communications. This important anniversary was naturally reflected not only in the advertising
in the air transportation industry.
campaign that focused on the Company image, but also provided the impetus to produce a unique
publication presenting the Czech national carrier’s history in detail. A Boeing 737-500 aircraft with the
OK-DGL registration and a special paint scheme created for the occasion, depicting the first aircraft in the
history of the CSA fleet (an Aero A-4 Brandenburg), attracted public attention all over Europe and was
one of the most photographed aircraft. The anniversary logo became a part of daily life in the Company
throughout the year.
A number of promotional and social events, organized mainly in the Czech Republic but also in most CSA
destinations, contributed to the Company’s good reputation.
Traditionally, CSA’s brand is associated with support for a wide variety of cultural, sporting and charity
events. This approach not only makes an important contribution to marketing communications, but is
also a clear statement of the Company’s social responsibility. Among CSA’s most notable activities in this
area were cooperation with the Prague Spring International Music Festival, the Prague State Opera, the
Czech Philharmonic Orchestra, the Czech Olympic Committee, the Czech Track and Field Association and
the Our Child Foundation.
Krakow, Kuwait, Larnaca, Ljubljana, London/Heathrow, London/Stansted, London/Gatwick, Luxembourg, Madrid, Manchester, Marseilles, Milan, Montreal, Moscow, Munich, New York/J. F. Kennedy, New York/Newark, Oslo, Ostrava, Paris, Riga, Rome,
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Prizes Awarded for 2003
CSA again defends the title “Best Airline on the Czech Market”
Maintaining its high standard of services is one of CSA’s priorities. The award “Best Airline on the Czech
Market” is evidence that these efforts have borne fruit. The prize was awarded to CSA by travel
professionals and readers of TTG magazine. This prestigious title is all the more significant for the
Company in that it has been awarded to CSA for the third year running.
The prize for “Best Airline of the Year 2003”
Less than eight months after launching scheduled flights between Prague and Edinburgh, CSA
representatives won the “Best Airline of the Year” prize during a gala evening of the Association of
Scottish Travel Agencies. The prize was awarded to CSA on 6 November 2003 in Glasgow by the BAA
(British Airport Authority).
“Exceptional Services” prize for 2003
The European public took note of the position CSA adopted after the floods that struck the Czech
Republic in 2002. The London-based company OAG (Official Airline Guides) recognized the help CSA
extended to people hit by the natural disaster by awarding the airline its prize for “Exceptional Services”.
Triumph in readers’ opinion poll
In the traditional opinion poll organized by Reader’s Digest, readers agreed that they regard CSA as the
most trusted brand in the airline category for the third time in a row (2001, 2002, 2003). The poll,
conducted in a number of European countries, confirmed that the fundamental CSA values, which are
safety, reliability and high quality of services, appeal to customers and are positively linked to our company.
High standard of care for regular customers
Every airline company aims to provide its regular customers with exceptional and above-standard service.
– award for CSA’s “OK PLUS” Frequent Flyer Programme
CSA’s Frequent Flyer Programme strives to fulfil this objective as well. The awards Czech Airlines received
from an expert jury in a competition featuring all the world’s airlines shows that CSA’s programme ranks
among the top products in the world:
Programme of the Year – 8th place, Best Bonus Promotion – 10th place, Best Web Site – 10th place,
Best Elite Level Programme – 10th place, Best Award Redemption – 11th place, Best Newsletter – 11th place,
Best Customer Service – 12th place
CSA as the “Best Airline Based in Central/Eastern Europe”
On 20 May 2004, readers of the London-based international airline guide Official Airline Guide (OAG)
chose CSA as the “Best Airline Based in Central/Eastern Europe”. This award characterizes a year of
European expansion for CSA at a time when the Czech Republic was preparing for EU accession.
Samara, Sliac, Sofia, Split, St Petersburg, Stockholm, Stuttgart, Tallinn, Tatry/Poprad, Tel Aviv, Thessalonica, Toronto, Venice, Vienna, Vilnius, Warsaw, Yerevan, Zagreb, Zürich, Amsterdam, Athens, Baku, Barcelona, Beirut, Belgrade, Berlin, Birmingham,
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Rewarding Loyalty – Frequent Flyer Programme The whole of CSA’s
Starting on 1 April, the minimum number of miles awarded for an international flight increased to 1,000.
anniversary year was celebrated with special bonuses for members of the
All new members were allowed to include miles earned on CSA flights in the three months before they
80th
Frequent Flyer Programme. Last year, the magic threshold of 100,000 members
joined the programme.
was surpassed, and as at 31 December 2003 there were 103,871 registered
members. Year-on-year growth stood at 9.51%.
Thanks to cooperation with KLM as an airline partner, passengers have the opportunity to earn and use
miles on KLM flights between Prague and Amsterdam.
During 2003, a unique project called Air Restaurant was launched in the Czech
Republic in connection with OK Plus. Passengers had a chance to celebrate CSA’s
Several worldwide hotel chains became non-airline partners, and expansion in this area was a priority in
80th anniversary in 80 restaurants all over the country and automatically earn travel
2003. The international hotel chains Accor (Sofitel, Novotel, Mercure), Barceló Hotels and Resorts,
miles on their OK Plus accounts based on the amount they spent. All passengers
Metropolitan Hotels International, Ramada International and the Hotel Crowne Plaza Prague were added
travelling with CSA or its programme partners during 2003 earned an extra 800
to the list. Programme members now have an even greater opportunity of earning miles in almost 1,500
bonus miles. A special bonus of 1,923 miles was awarded to all passengers who
new hotels in several dozen countries worldwide.
travelled on a CSA flight on 28 October 2003, the precise date of the anniversary.
An additional 500 miles went to all passengers travelling that day on a CSA flight
Cooperation with telecommunication partners was a new development. For the first time, programme
from Prague to Bratislava, which was CSA’s first ever route. All new members
members had an opportunity to earn miles for Eurotel and TELE2 phone calls. Cooperation with Shell was
earned a bonus of 2,000 miles for joining.
extended to cover Slovakia.
In collaboration with Avis, members have now a chance to redeem their miles for car rentals in selected
countries worldwide.
A special air mile account was opened to support handicapped athletes in the Czech Paralympic Team.
Programme members can donate their miles to this account, which will be used for bonus air tickets to
carry handicapped athletes to international qualification competitions.
A new CSA Call Centre was opened in 2003, which helped to improve communications with programme
members. All telephone and electronic communications can now be answered daily from 6 a.m. to 10 p.m.
in five international languages. The new Call Centre features a voice information tree, which is available
to members 24 hours a day, seven days a week. The system provides information about the programme,
including current account balances.
Bologna, Bratislava, Brno, Brussels, Budapest, Bucharest, Cairo, Cologne, Colombo, Copenhagen, Cork, Dortmund, Dubai, Dublin, Düsseldorf, Edinburgh, Ekaterinburg, Frankfurt, Gothenburg, Hamburg, Hannover, Helsinki, Istanbul, Karlovy Vary, Kiev,
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Perfect In-Flight Care During 2003, several developments were reflected
Passengers travelling on long-distance A310 aircraft have an opportunity to try new French, Chilean and
in in-flight services.
Californian wines. Each passenger receives a multi-page wine list describing the taste of each of the
wines offered and a picture of the label. Wines in both classes are poured directly from 0.7 litre bottles.
In the field of complimentary in-flight refreshments and drinks, the main change was
in the range of wines. Quality wines produced by Révovin Velké Bílovice – Habánské
Spirits in miniature bottles for Economy Class passengers on long-haul A310 aircraft have been replaced
sklepy are served in Economy Class. Four different wines with special attributes
by aperitifs poured from half-litre bottles. Passengers can choose from five different drinks: Finnish vodka,
produced by Znovín are served in Business Class. The range was expanded to
Ballantine, Becherovka, Beefeater Gin and Napoleon Brandy.
include the sparkling wines Bohemia Sekt Prestige Brut and Bohemia Regia Brut.
A new graphic design, featuring a new colour scheme and patterns, has been prepared for all menus in
collaboration with an external agency.
The range of refreshments available for Business Class passengers travelling on long-haul flights has been
extended to include soup.
To improve cabin comfort for passengers, single-sheet safety instructions have been introduced. The
instructions for each type of aircraft have an up-to-date graphic design with maximum use of pictograms
instead of text. New amenity kits have been introduced for Economy Class passengers on long-haul
flights. The new kits feature a higher quality content in newly designed transparent sachets. Business
Class passengers travelling on long-haul flights are now offered new amenity kits presented in the form
of a functional CD carrier.
Kosice, Krakow, Kuwait, Larnaca, Ljubljana, London/Heathrow, London/Stansted, London/Gatwick, Luxembourg, Madrid, Manchester, Marseilles, Milan, Montreal, Moscow, Munich, New York/J. F. Kennedy, New York/Newark, Oslo, Ostrava, Paris, Riga,
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CSA for Children The Our Child Foundation CSA flights, where passengers
Children on board The goal of the children’s programme is to keep younger passengers happy when they
have the opportunity to support the Our Child Foundation, are a clear indication
are on board CSA aircraft. During the flight, cabin crews give out gift kits to all children – small drawing
that we are not forgetting the most needy even when we are high in the sky.
boards, various jigsaws and puzzles, pencils, crayons or small pendants with the CSA logo. There are
two kinds of kit – for younger children and older children, and they are modified several times a year.
The Foundation operates the Safety Line for Children, and every year CSA donates
The children’s magazines Sluníãko and Matefiídou‰ka are available on long-haul flights.
a considerable amount to its operation, part of which comes from our passengers.
Over CZK 130,000 was collected during 2003. The Safety Line is in constant
The children’s Junior Passport sweepstakes continued in 2003. The Junior Passport is offered to children
operation 24 hours a day, 365 days a year. Donations for the operation of this line
together with the gift kit. During every CSA flight, children can turn to the children’s page of the CSA
will continue to be collected on board our aircraft. Air crews and, most of all,
Review magazine to find out how many points they can earn for each flight. Those points are recorded in
Czech Airline’s passengers deserve the greatest thanks for this help.
their Junior Passports. As soon as these small travellers earn at least 1,000 points, they receive a bonus
gift – a T-shirt with a children’s CSA logo, or a watch (with a sweep-second hand in the shape of an
aircraft) as a second prize for earning 2,000 points. The first prize, awarded for 3,000 points earned on
Czech Airlines flights, is a vacation kit with a CSA logo.
European flights also offer rattles or teething rings for infants. Mothers will appreciate Baby Kits – with
diapers pants and wet towels – offered on longer-haul flights. Toddler “baskets” are available on board
all aircraft. Baby carriages can be taken into the passenger cabin, where they are stowed by the cabin
crew in the luggage compartment.
Younger passengers travelling without their parents are taken care of as soon as they check in by a VIP
Service assistant, who looks after them until they get on board. The child is then handed over to the crew
members, who are responsible for the child during the flight.
CSA also pays attention to the special meals it prepares for young passengers. When buying the air ticket,
a special-request baby meal or child meal can be ordered based on the age of the child.
Rome, Samara, Sliac, Sofia, Split, St Petersburg, Stockholm, Stuttgart, Tallinn, Tatry/Poprad, Tel Aviv, Thessalonica, Toronto, Venice, Vienna, Vilnius, Warsaw, Yerevan, Zagreb, Zürich, Amsterdam, Athens, Baku, Barcelona, Beirut, Belgrade, Berlin,
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SkyTeam Alliance
In 2003, CSA celebrated not only its 80th anniversary, but also its second year
The acceptance of Czech Airlines as a member of the SkyTeam Alliance reflects how much the
as a fully-fledged member of the international SkyTeam Alliance. SkyTeam
competitiveness and quality of CSA is appreciated in the worldwide air transport market by the other
membership gives CSA a higher profile worldwide.
members of the Alliance. It is also a sign that the Alliance members are convinced CSA is capable of providing
SkyTeam Alliance customers with services of the highest standard on a par with the other members.
CSA’s Membership of the SkyTeam Alliance In 2003, Czech Airlines
Thanks to CSA’s SkyTeam membership, the Company is a part of a global system with a fleet of 1,700
entered its third year as a member of the SkyTeam global alliance. CSA
aircraft offering the public nearly 8,000 departures a day to more than 500 destinations in 110 countries
became a fully-fledged member on 25 March 2001 when it joined the
worldwide. The combined frequent flyer programme of all Alliance members has nearly 50 million
Alliance’s four incumbentcarriers (Air France, Delta Air Lines, AeroMexico,
members who are welcomed at 338 SkyTeam Business Class lounges all over the world.
Korean Air). Alitalia became a member shortly after CSA (in July 2001).
Aside from the appreciation shown by other members for the quality of CSA services, the Company has
assumed a significant position within the SkyTeam Alliance because of its specialization in Central and
Eastern Europe. Therefore, in addition to Paris, Atlanta, Mexico City, Milan, Rome and Seoul, Prague Airport
has become a significant hub for SkyTeam Alliance customers travelling to Central and Eastern Europe.
CSA’s third year as a SkyTeam Alliance member fostered deeper cooperation among the Alliance
members. One achievement was to extend the exemption from laws protecting economic competition
(antitrust immunity) granted to four Alliance members (CSA, Air France, Alitalia and Delta Air Lines) to
Switzerland, while negotiations with the competent authorities in other countries continued. Gaining
antitrust immunity significantly enhanced the potential for integrated cooperation among the Alliance
members, and, in CSA’s case, particularly on transatlantic flights with Delta Air Lines and the other two
European SkyTeam Alliance members.
Birmingham, Bologna, Bratislava, Brno, Brussels, Budapest, Bucharest, Cairo, Cologne, Colombo, Copenhagen, Cork, Dortmund, Dubai, Dublin, Düsseldorf, Edinburgh, Ekaterinburg, Frankfurt, Gothenburg, Hamburg, Hannover, Helsinki, Istanbul,
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This exemption allowed SkyTeam Alliance members to cultivate close coordination,
In 2003, customer care continued to be a principal focus for the SkyTeam Alliance, as expressed in the
especially in marketing and sales programmes, frequent flyer programmes, and
basic motto of the Alliance: “Caring more about you”. This motto is manifested in a number of joint
distribution channels, including the possibility of opening joint sales and airport
products offered by CSA in cooperation with other Alliance members, such as the above-mentioned
offices. In 2003, joint airport offices were successfully completed and opened at
combination of Alliance members’ frequent flyer programmes. This makes it possible to obtain bonus air
Paris airport, and also at airports in Brussels and Bucharest. This deeper level of
tickets for flights operated by all Alliance airlines, to benefit from priority airport check-in, to reserve seats
cooperation means we can offer customers a higher quality and more competitive
even on fully-booked flights, and to access the airport lounges of all Alliance members.
product with a broader array of services. Close cooperation among SkyTeam
Alliance members also helps to utilize airline resources effectively and therefore to
An important part of Alliance cooperation is the development of bilateral relations between individual
improve financial results.
Alliance members. Preparations were begun in 2003 for the transition of the now traditional code-share
cooperation with Alitalia on all four scheduled routes (Prague – Milan/Rome/Bologna/Venice flights) into
a higher form of cooperation of a joint-venture type.
In cooperation with Delta Air Lines, the number of code-shared flights was increased by several new
destinations. Preparations for code-share with Delta Air Lines’ subsidiary companies Song and Chautauqua
Airlines began.
Negotiations were launched with Korean Air on introducing a new Seoul – Prague direct flight, starting
with the summer 2004 schedule.
SkyTeam Alliance entered into negotiations with the prominent companies Continental, Northwest and
KLM on their membership of the Alliance. At the same time, Air France began negotiations with KLM on
the merger of the two companies. This merger would give rise to the largest airline company in the world.
Based on a cooperation agreement between the SkyTeam Alliance and Coca-Cola, a new advertising
campaign was launched during autumn 2003. Major television channels with worldwide coverage were
involved in order to ensure that the campaign was as effective as possible. SkyTeam and Coca-Cola
became sponsors of weather forecasts on CNN, CNBC and BBC channels. The CSA name and logo
therefore became visible, by way of the SkyTeam Alliance, to television viewers all over the globe.
Karlovy Vary, Kiev, Kosice, Krakow, Kuwait, Larnaca, Ljubljana, London/Heathrow, London/Stansted, London/Gatwick, Luxembourg, Madrid, Manchester, Marseilles, Milan, Montreal, Moscow, Munich, New York/J. F. Kennedy, New York/Newark, Oslo,
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The main theme and strategy for the SkyTeam Alliance in 2003 were joint
The possibility of the joint acquisition of regional jets is currently under investigation. The initial results of
purchases in order to reduce costs. This activity was supported by the supreme
this area of cooperation are already known. The first contract – an MOU (Memorandum of Understanding)
body within the SkyTeam Alliance – the Governing Board. A letter from the six
– has been signed with Hamilton SundStrand (aircraft systems and components), the result of group
presidents addressed to all work teams and groups in the Alliance expressed
activity directed toward the purchase and maintenance of aircraft systems. Another important project is
support for efforts to seek out and create savings in all areas of activity. Executive
airport re-locations, which is a way of exploiting common SkyTeam terminals at each airport. Intensive
sponsors, at the vice-presidential level of management, were nominated to
negotiations are under way with representatives of the airports at Heathrow, Narita in Tokyo, and
oversee personally the most significant areas of joint procurement to ensure even
Madrid. Other areas of interest include purchases of fuel, handling services, catering, ground support
greater savings. Positive support for collaboration in all activities was clearly
equipment, IT and aircraft technical maintenance.
voiced, even in cases where not all companies would be involved.
Considerable emphasis is placed on international communication between employees of the individual
Alliance member companies. To this end, a special training programme has been prepared in association
with a reputable specialist in this field, LTS Training and Consulting. The programme concentrates on
multicultural communication and aims to eliminate possible sources of misunderstanding caused by
different cultural values and to streamline communication in the individual work groups and teams of the
Alliance. The SkyTeam has therefore become the first alliance worldwide to focus on international (or more
precisely multicultural) communication.
Information on SkyTeam members
SkyTeam AeroMexico
Year of establishment
Fleet
(June 2003)
Number of flights daily
(Summer 2003)
Employees
(June 2003)
Top representative
Air France
Alitalia
2000
1934
1933
1946
1923
CSA Delta Air Lines
1924
Korean Air
1969
1,164 + 540
affiliates
67
245 + 111
affiliates
149 + 31
affiliates
35
551 + 398
affiliates
117
7,698
150
1,800
786
78
4,501
383
182,783
6,669
71,525
22,626
4,619
59,666
17,678
Arthuro
Batahma
Jean-Cyril
Spinetta
Giuseppe
Bonomi
Jaroslav
Tvrdík
Gerald
Grinstein
Yang
Ho Cho
Ostrava, Paris, Riga, Rome, Samara, Sliac, Sofia, Split, St Petersburg, Stockholm, Stuttgart, Tallinn, Tatry/Poprad, Tel Aviv, Thessalonica, Toronto, Venice, Vienna, Vilnius, Warsaw, Yerevan, Zagreb, Zürich, Amsterdam, Athens, Baku, Barcelona, Beirut,
Belgrade, Berlin, Birmingham, Bologna, Bratislava, Brno, Brussels, Budapest, Bucharest, Cairo, Cologne, Colombo, Copenhagen, Cork, Dortmund, Dubai, Dublin, Düsseldorf, Edinburgh, Ekaterinburg, Frankfurt, Gothenburg, Hamburg, Hannover, Helsinki,
Domestic and international air transport flourished, with flights planned to the USA and Canada and new airports under construction
in Brno, Ostrava, and Bratislava. However, Czechoslovakia suddenly found itself behind the Iron Curtain following the events of February 1948,
and for decades afterwards only Soviet-made Ilyushins and Tupolevs were added to the fleet of aircraft.
Istanbul, Karlovy Vary, Kiev, Kosice, Krakow, Kuwait, Larnaca, Ljubljana, London/Heathrow, London/Stansted, London/Gatwick, Luxembourg, Madrid, Manchester, Marseilles, Milan, Montreal, Moscow, Munich, New York/J. F. Kennedy,
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The CSA Fleet
The Czech Airlines Fleet
CSA began 2003 with a fleet comprising
CSA’s fleet in 2003
31 aircraft. During the year, another four airplanes were acquired by means of
operating leases, beginning in March with a B737-400 aircraft in a 144 C/Y
configuration (OK-YGU). Two B737-500 aircraft in 108 C/Y configuration
(OK-XGV and OK-XGW) followed in April and May. In June, a long-awaited
newcomer to the CSA long-haul fleet was acquired: the third A310-300
aircraft in 18 C/183 Y configuration (OK-YAC).
All CSA planes with a maximum take-off weight of more than 45,000 kg were
modified over time by reinforcing cockpit doors in accordance with amendments
to the ICAO Annex 6.
CSA’s fleet at year-end 2003
Type of plane
Airbus A310-300
Airbus A310-300
Boeing B737-400
Boeing B737-400
Boeing B737-500
Aerospatiale-Alenia ATR72
Aerospatiale-Alenia ATR42
Number
2
1
8
3
12
4
5
Carrying capacity
21 C/188 Y
18 C/183 Y
Max. 144*)
Max. 162*)
Max. 108*)
Max. 64*)
Max. 46*)
*) Note: The number of seats in Business and Economy classes is flexible and depends on actual demand
for a given flight.
Type
A310-304
A310-304
A310-325
ATR72-202
ATR72-202
ATR72-202
ATR72-202
ATR42-400
ATR42-400
ATR42-320
ATR42-320
ATR42-320
B737-400
B737-400
B737-400
B737-400
B737-400
B737-400
B737-400
B737-400
B737-400
B737-400
B737-400
B737-500
B737-500
B737-500
B737-500
B737-500
B737-500
B737-500
B737-500
B737-500
B737-500
B737-500
B737-500
Registration mark
OK-WAA
OK-WAB
OK-YAC
OK-XFA
OK-XFB
OK-XFC
OK-XFD
OK-AFE
OK-AFF
OK-BFG
OK-BFH
OK-VFI
OK-WGF
OK-WGG
OK-CGI
OK-DGM
OK-DGN
OK-EGP
OK-FGR
OK-FGS
OK-BGQ
OK-CGT
OK-YGU
OK-XGA
OK-XGB
OK-XGC
OK-XGD
OK-XGE
OK-CGH
OK-CGJ
OK-CGK
OK-DGL
OK-EGO
OK-XGV
OK-XGW
Name
Praha
Bratislava
Zlín
âesk˘ Krumlov
Znojmo
Nitra
Mladá Boleslav
Kolín
Kutná Hora
Rakovník
Telã
Sky Rider
Jihlava
Liberec
Prostûjov
TfieboÀ
Tfiebíã
Kladno
Ostrava
Brno
Karlovy Vary
Písek
Mûlník
PlzeÀ
Olomouc
âeské Budûjovice
Poprad
Ko‰ice
Ústí nad Labem
Hradec Králové
Pardubice
Tábor
JindfiichÛv Hradec
Mariánské Láznû
Franti‰kovy Láznû
Date of production
20 November 1990
5 February 1991
24 February 1993
12 December 1992
17 February 1992
26 March 1992
15 April 1992
5 December 1995
15 January 1996
23 May 1996
11 June 1996
2 January 1990
6 January 1991
11 December 1990
1 January 1997
6 April 1998
17 May 1998
18 March 1999
24 February 2000
24 February 2000
21 December 1996
17 January 1997
14 June 1993
12 June 1992
1 July 1992
8 July 1992
29 July 1992
6 August 1992
12 March 1997
12 March 1997
22 May 1997
18 March 1998
16 February 1999
13 July 1992
14 September 1992
Date of delivery
11 February 1991
1 March 1991
7 June 2003
9 April 1992
14 April 1992
24 April 1992
21 May 1992
11 March 1996
14 March 1996
2 June 1999
19 August 1999
15 May 2000
26 April 1995
20 March 1995
26 March 2001
7 April 1998
18 May 1998
19 March 1999
25 February 2000
25 February 2000
6 April 2001
24 May 2002
28 March 2003
3 July 1992
6 July 1992
10 July 1992
31 July 1992
7 August 1992
13 March 1997
13 March 1997
23 May 1997
19 March 1998
17 February 1999
29 April 2003
28 May 2003
New York/Newark, Oslo, Ostrava, Paris, Riga, Rome, Samara, Sliac, Sofia, Split, St Petersburg, Stockholm, Stuttgart, Tallinn, Tatry/Poprad, Tel Aviv, Thessalonica, Toronto, Venice, Vienna, Vilnius, Warsaw, Yerevan, Zagreb, Zürich, Amsterdam, Athens,
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Technical Maintenance CSA’s Technical Division is responsible for the
Customer aircraft maintenance During 2003, maintenance of Boeing 737 (NG) aircraft for Air Berlin
maintenance of aircraft technology and for the maintenance and technical
was broadened to the 6C check level. In addition, a number of checks on Boeing 737-800 aircraft were
condition of the CSA fleet. Further responsibilities include the preparation
conducted for Hapag Lloyd Flug.
and implementation of a maintenance program for CSA aircraft, the
monitoring of maintenance program effectiveness, and both mandatory
Owing to the quality of its maintenance service, in 2003 CSA managed to acquire a new and discerning
and optional modifications.
customer, Dutch Transavia Airlines, which had previously had its Boeing 737-800 aircraft maintained by
its 100% owner, KLM. Towards the year’s end, the first inspections were carried out for this company on
Czech Airlines is also a sought-after aircraft maintenance provider used by other
the basis of a four-year contract.
aircraft operators, including Air Berlin, Transavia, and Happag Lloyd, who appreciate
the technical staff’s experience and expertise, as demonstrated by high-quality
Customer C checks carried out by CSA in 2003 included large-scale and technically difficult modifications
maintenance and short delivery terms.
of Boeing 737-800 aircraft, such as the replacement of the bushings used for mounting horizontal
stabilizers, modification of elevator rudders, installation of a drying system for the aircraft’s
Through its representatives, CSA also actively participated in the activities of
environmental control (heat insulation), and a number of other modifications.
expert commissions for aircraft maintenance within the Association of European
Airlines (AEA).
Cooperation with a local company, Fischer Air, for whom CSA has provided comprehensive support and
maintenance for its Boeing 737-300s since 1997, was prolonged in 2003 with the signing of a contract to
CSA aircraft maintenance In 2003, CSA in Prague provided complete maintenance
provide comprehensive maintenance services for its aircraft over the next four years.
of all operating aircraft, including extensive IL checks (five-year inspections) carried
out on several Boeing 737 aircraft. The maintenance staff also carried out all
Repair plant maintenance CSA successfully continued the landing gear general overhaul of Boeing 737
unplanned aircraft repairs, including two large-scale airframe repairs together with
aircraft for Lufthansa Technik AG, Tarom, and its own aircraft of this type. As such, it profiled as a provider
the exchange of covering panels.
of maintenance for aircraft components and devices, and began repairing components for its first foreign
customers – Hapag Lloyd Flug and Bel-AirExpress.
With the introduction of the newly acquired Airbus A310-300 aircraft, equipped
with Pratt & Whitney PW4000 engines (not previously used in any CSA fleet
The Company successfully branched out into Engine On-Wing Support, providing maintenance services
aircraft), the maintenance capacity was expanded in order to ensure the aircraft’s
for engines without dismounting them from the aircraft. CSA provided this service to Air Berlin, Air
trouble-free operation.
Ukraine International, Fischer Air and Snecma Services, France. CSA performed Boeing 737 NG engine
replacements in Paris for Snecma Services and its customers.
Baku, Barcelona, Beirut, Belgrade, Berlin, Birmingham, Bologna, Bratislava, Brno, Brussels, Budapest, Bucharest, Cairo, Cologne, Colombo, Copenhagen, Cork, Dortmund, Dubai, Dublin, Düsseldorf, Edinburgh, Ekaterinburg, Frankfurt, Gothenburg,
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2003 Results CSA Cargo is a division of the Company organizing
The new cargo terminal A new modern building has been constructed at the Prague-Ruzynû Airport.
airfreight transport and the dispatching of goods at Prague-Ruzynû Airport. 2003
Less than 12 months after the foundation stone was laid, and towards the end of the jubilee year, a brand
was a successful year for the division, as it managed to boost transported volume
new cargo terminal passed inspection, and trial operations were launched. The annual handling capacity
by a remarkable 17% compared with 2002. CSA’s position was strengthened in
of the terminal is 60,000 tonnes of freight and mail. Soon after, in the middle of January 2004, the cargo
a number of foreign markets, and in several of these it was singled out as the
business moved into the new terminal and normal operations began. The old building was demolished as
fastest-growing company in the air cargo market.
part of the construction plans for the new North-2 passenger terminal.
In 2003, our customers were able to appreciate the enlarged capacities to
Thanks to an investment of approximately CZK 750 million, a new logistics centre was set up in Prague
attractive destinations in Eastern Europe and the Middle East, the improved
with the ambition to become an important transit point for Central and Eastern Europe. The cargo
monitoring of consignments during their transportation to the end user, and
terminal is equipped with up-to-date technology, offering short transit times and all the technology
better product distribution at a number of foreign stations.
needed to handle shipments of all kinds.
Combined with the truck and mail centres, the cargo terminal area is a true logistics transit centre. The
annual flow of air cargo through the Prague airport in 2003 was close to 50,000 tonnes, and within the
next five years growth is expected to double. If need be, the new terminal’s capacity can be raised to
100,000 tonnes annually.
Lifting the cargo terminal roof New technologies and convenience for customers and employees are
the main defining points of the newly opened cargo terminal. We can offer our customers not only
a pleasant, modern environment for handling air consignments, but also stylishly equipped office space,
food services and a large car park, which is one of the few at the Prague airport with sufficient capacity.
DHL has rented a significant part of the office and storage area in the cargo terminal. DHL has been
joined by âeská po‰ta, s.p. (the Czech Post Office), thus concentrating express and mail services at the
2003
2002
2003/2002
index
Freight and mail transported
22,473
19,171
1.17
Goods handled by CSA at Prague-Ruzynû Airport
25,724
25,100
1.02
CSA’s market share of freight handling
at Prague-Ruzynû Airport
airport under one roof. The terminal is equipped with an automated system for handling and storing air
pallets and containers, using ETV (Elevating Transfer Vehicle) equipment. This substantially reduces the
time needed to handle air consignments and freight transported by trucks.
53%
Hamburg, Hannover, Helsinki, Istanbul, Karlovy Vary, Kiev, Kosice, Krakow, Kuwait, Larnaca, Ljubljana, London/Heathrow, London/Stansted, London/Gatwick, Luxembourg, Madrid, Manchester, Marseilles, Milan, Montreal, Moscow, Munich,
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Truck centre
Back Scatter x-ray equipment
– Direct processing of palletized units from cargo aircraft to trucks or vice versa
The first x-ray equipment of its type in the Czech Republic, capable of screening parcels that are wider
– System of roller conveyers connecting to storage of pallets and containers (ULD)
than 163 cm and of unlimited height and length.
– Movable adjusting bridge to allow for the servicing of any kind of vehicle
Refrigerators and freezers
Automated pallet and container storage with a high-lift stacker
Storage of perishable consignments, temperature control from -25 to 8°C.
– Fully automated system linked to the truck centre by roller conveyers
– 100 places for air pallets and containers
Cooperation within the Alliance In 2003, CSA continued to support cooperation within the SkyTeam
– Places for 20-foot pallets with regulated temperature
Cargo Alliance, a group of airlines cooperating in various areas of airfreight transport. The Alliance’s
members are AeroMexico, Air France, Czech Airlines, Alitalia, Delta Air Lines and Korean Air. In relation
Security system
to the general public and customers, these companies are profiled under the trademarks of their cargo
– Closed-circuit television and permanent security service surveillance
divisions, i.e. AeroMexico Cargo, Air France Cargo, CSA Cargo, Delta Air Logistics and Korean Air Cargo.
– Electronic security system
– Automatic fire alarm system
The integration process under which Alliance consignments are handled “under one roof” continued at
a number of other airports. This results in lower costs and allows for a standard product to be created
within the Alliance.
New York/J. F. Kennedy, New York/Newark, Oslo, Ostrava, Paris, Riga, Rome, Samara, Sliac, Sofia, Split, St Petersburg, Stockholm, Stuttgart, Tallinn, Tatry/Poprad, Tel Aviv, Thessalonica, Toronto, Venice, Vienna, Vilnius, Warsaw, Yerevan, Zagreb, Zürich,
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Charters Competition in the charter flight market is strong in the Czech
The main positive trends in charter transport during 2003 were:
Republic. In addition to CSA, the airline companies Travel Service and
– Sustained economic results, despite the decrease in revenues.
Fischer Air also have strong positions thanks to their own “domestic” travel
– The opening of new charter destinations offered to the Czech market.
agents who exclusively fill their companies’ flights. Travel Service is linked
– The low frequency of delays and timetable changes in comparison to competitors, which is a positive
to âedok and Fischer Air is linked to CK Fischer.
factor for business acquisition in the following year.
– Preparation for the launch of long-distance charter transport, using the residual capacity of A310
During 2003, CSA experienced a drop in both passenger numbers and revenues in
aircraft. This has helped boost CSA’s standing in the charter market, even though only two routes out
charter transport. The main reasons for this were decline of incoming tourism to
of the planned eight were realized between December 2003 and March 2004.
the Czech Republic caused by the situation in the Middle East, exchange-rate
fluctuations and recurring growth in Travel Service’s capacity during the main
Fleet usage for regular charter transport At commercially advantageous times, the charter fleet was
tourist season.
used for scheduled flights, and part of the fleet for scheduled flights, especially those aircraft for markets
requiring a lower seating capacity, was used for charter requirements at less attractive times. The charter
fleet was also used as a backup during the winter months, when the scheduled-flight fleet undergoes
larger-scale maintenance.
CSA uses the charter fleet for scheduled flights to destinations where the available capacity needs to be
increased at certain times, and where aero-political or organizational reasons require supplementary
flights on routes served by scheduled flights. Therefore, charter activities indirectly help to boost the
potential capacity of CSA scheduled flights.
In light of the need to check the decline in CSA’s charter market share and to kick-start a growth trend in
both market share and revenues from charter transport, it was decided toward the end of 2003 to
transform the Charter Division into a strategic business unit. This will create the greater flexibility needed
for such activities. In reality, this transformation is inevitable also with regard to the Czech Republic’s
accession to the European Union, which is forming a unified and deregulated market in charter
transportation. While this will result in keener competition in this field, it also gives rise to new business
1999
2000
2001
2002
2003
211,501
244,594
317,682
260,048
243,992
Market share %
22.5
20.7
23.29
19.23
16.65
Share of Czech carriers %
86.3
88.9
93.3
94
95
Number of passengers
opportunities.
Amsterdam, Athens, Baku, Barcelona, Beirut, Belgrade, Berlin, Birmingham, Bologna, Bratislava, Brno, Brussels, Budapest, Bucharest, Cairo, Cologne, Colombo, Copenhagen, Cork, Dortmund, Dubai, Dublin, Düsseldorf, Edinburgh, Ekaterinburg,
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Information Technology At the end of 2003, a fundamental transformation
Likewise, work continued on expanding the services of CSA’s Call Centre. A solution providing an audio
of user technology was launched to increase the capacity of workplaces and
information system that is based on voice-recognition ability has begun to serve customers both at home
to accomplish the transition to a uniform user environment based on
and abroad. This work included implementing the system’s different language versions.
Windows so that users’ working conditions could improve. Simultaneously,
mobile computing and communication technologies were substantially
In order to improve customer services, considerable effort was devoted to the development of electronic
expanded. Preparatory work started on expanding the possibilities CSA
ticketing. Trial runs in the first destinations will be carried out in the first half of 2004. The development
personnel have of using mobile offices both in the Czech Republic and in
programme also includes extending the system’s potential by introducing an interline ticketing function
other countries where the Company is represented.
that will make it possible to use an electronic airline ticket for a connecting flight with another airline.
In 2003, the airline ticket selling equipment in CSA offices in the Czech Republic
The first stage of the Less Paper Cockpit project was launched in 2003. By the end of the year, the system
and abroad was completely changed. On the basis of a contract with the SITA
for Boeing aircraft using special laptop computers designed and certified for in-flight use was implemented.
organization, reservation system terminals were replaced with new intelligent
The system will simplify and improve the transfer of flight data to the aircraft crew, and thus make the
PC-based terminals.
crew’s job more efficient.
The development of existing systems, especially with respect to the monitoring of labor intensity,
continued in the technical maintenance area.
The Ground Personnel Planning project was launched in the autumn of 2003.
As a member of SkyTeam, CSA contributes to the strategy for joint development in the area of information
technologies integration. Current joint projects include Financial Settlement (mutual reconciliation
between SkyTeam members on transatlantic lines) and Interline Electronic Ticketing (mutual acceptance
of electronic tickets within the network of SkyTeam members). The majority of projects that have been
completed or are being developed are aimed at using modern technologies related to the Internet.
Frankfurt, Gothenburg, Hamburg, Hannover, Helsinki, Istanbul, Karlovy Vary, Kiev, Kosice, Krakow, Kuwait, Larnaca, Ljubljana, London/Heathrow, London/Stansted, London/Gatwick, Luxembourg, Madrid, Manchester, Marseilles, Milan, Montreal,
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Projects for 2004 The following areas will be of key significance for the
Major projects for 2004 include:
development of information technology: the implementation of integrated
– Executive management reporting and the efficient use of existing systems for controlling, including the
systems for sales support and customer care (CRM), the upgrading of existing
implementation of the monitoring of financial and non-financial indicators as a basis for decision-making.
management information systems that use financial and non-financial
– Expansion of the existing system for budgeting, planning, monitoring fulfilment and analysis.
indicators, including the development of data storage, and the innovation of
– Substantial expansion of CSA’s data storage as a uniform source of data for strategic and operational
systems for monitoring and optimizing CSA’s key resources (e.g. optimization
of crews, aircraft, flight scheduling, and the maintenance system).
analyses and forecasting.
– Changes to processes in connection with the Czech Republic’s accession to the European Union,
including implementation of a new system for duty-free sales.
– Continuation of the Less Paper Cockpit project.
– Implementation of an integrated system of catering management.
– Implementation of the system for Ground Personnel Planning.
– MRO – Preparation of a project for the implementation of a maintenance system.
– ERP – Development of processes for purchasing and inventories management of non-aviation materials.
– Global VPN – launch of a global Virtual Private Network connecting all workplaces and employees.
Moscow, Munich, New York/J. F. Kennedy, New York/Newark, Oslo, Ostrava, Paris, Riga, Rome, Samara, Sliac, Sofia, Split, St Petersburg, Stockholm, Stuttgart, Tallinn, Tatry/Poprad, Tel Aviv, Thessalonica, Toronto, Venice, Vienna, Vilnius, Warsaw,
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CSA Services at Prague-Ruzynû Airport
Ground services, which include passenger and aircraft handling, the
Passenger and Aircraft Handling In the fiercely competitive environment at the Prague airport,
preparation of refreshments and meals served in-flight, and duty-free sales
Czech Airlines has maintained its dominant market position. In 2003, CSA handled 5,392,338
of goods, are an inseparable part of an air carrier’s activities. Czech Airlines
passengers in the course of 78,231 departures and landings, which means a 14.5% year-on-year
considers these to be among its top priorities and is continuously
increase in the number of passengers and a 73% share in total throughput at Prague-Ruzynû
improving their quality.
Airport. Alitalia, Kuwait Airways and Sky Europe became new handling clients for CSA in 2003.
All activities related to passenger handling in 2003 were aimed at raising the standard of services,
especially in the Business Class segment and for CSA’s regular clients. New positions for the priority check-in
of these passengers have been established at Transit, Claims and Ticket Sales points.
The system for handling CSA European flights now has a new form – a designated space with a dominant
information panel, more counters for checking in Business Class passengers and a “welcome” agent
continually at hand to provide the first contact with passengers entering the check-in area. Free
newspapers and magazines are available at Business Class counters and in the boarding areas for
long-haul flights.
Two important decisions were taken in 2003 to improve the quality of ground service: first, to revamp the
business lounge (to be completed in April/May 2004), and, secondly, to make changes in the check-in
system for domestic flights (to take effect on 1 May 2004).
Yerevan, Zagreb, Zürich, Amsterdam, Athens, Baku, Barcelona, Beirut, Belgrade, Berlin, Birmingham, Bologna, Bratislava, Brno, Brussels, Budapest, Bucharest, Cairo, Cologne, Colombo, Copenhagen, Cork, Dortmund, Dubai, Dublin, Düsseldorf,
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Duty Free Modifications and actions carried out in the previous two years
Catering Interest in air transport began to rise again in 2003, and demands on in-flight services
began to pay off when the Duty Free Department reported positive results
registered a parallel increase. Catering production, profiting mainly from the rise in passenger
for 2003. In particular, the Prague Airport shop was expanded by 32 square
numbers on CSA flights, got fully off the ground. For the first time in history it produced more
meters. Shop reconstruction and a self-service system were implemented at
than four million meals (4,202,285), which is 15% more than in the previous year. Production for
Karlovy Vary Airport. In both shops there are new cash registers that can be
Czech Airlines accounted for 88% of total output. The extent of services provided to other
used in two price formats (Czech crowns and Euros) in the wake of the
airlines has not yet reached the pre-2001 level, although 14 companies used CSA’s catering
Czech Republic’s accession to the EU.
services in 2003 and almost 500,000 meals were delivered.
The Duty Free Department’s record revenue of CZK 694,435,000 generated in
Services for charter transport and private carriers, as well as for social, cultural and sporting events, also
2003 is not so surprising when the above-mentioned facts are taken into
made an important contribution to catering activities.
consideration, along with the high productivity of Duty Free personnel and the
range of goods that is continuously diversified and replenished with new and
Lately, though, growth has been hampered by the capacity of production facilities. Following the extensive
desirable items of higher quality. In comparison with 2002, revenues were up by
reconstruction of part of the building in 1999, demands on production increased, but the production
nearly CZK 91 million, which represents a 15% increase. These revenues amount
area itself has not been rebuilt. The capacity of the production facilities is therefore becoming an
to more than CZK 9.3 million per employee of the Duty Free Department.
increasingly limiting factor. In this respect, preparations began in 2003 for a project of expansion and
reconstruction that should be realized in the 2004 – 2005 period.
The shares of individual units in total revenues were as follows: 81.6% from the
Prague shop, in-flight sales of 17.1%, and 1.3% from the shop in Karlovy Vary.
Edinburgh, Ekaterinburg, Frankfurt, Gothenburg, Hamburg, Hannover, Helsinki, Istanbul, Karlovy Vary, Kiev, Kosice, Krakow, Kuwait, Larnaca, Ljubljana, London/Heathrow, London/Stansted, London/Gatwick, Luxembourg, Madrid, Manchester,
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Operations Safety
One of the key values that CSA has declared a priority and considers the
Air Operator Certificate Czech Airlines’ CZ-1 Air Operator Certificate was again renewed in
moral foundation of its business activity is air transport safety.
January because the company complied with all safety requirements stipulated by the JAR-OPS 1
regulation and by Act No 49/1997 Coll., on civil aviation. CSA has been repeatedly recognized as
A high standard of safety is a goal that our company has always in mind, whether
competent to operate commercial air transport. The issuance of the Air Operator Certificate was
it is striving to ensure the regularity of air transport, to minimize time losses, or to
preceded by several audits and inspections by inspectors of the Civil Aviation Authority of the Czech
guarantee flawless baggage handling. Therefore, CSA is committed not only to
Republic to verify compliance with the applicable aviation rules and regulations as well as safety standards
developing steadily as a modern, comfortable, accommodating and friendly
in the areas of operations management, air traffic, air crew training, dangerous goods and the system of
company, but also aims to be a safe and reliable company.
quality. The certificate issued to the Company is valid until 31 January 2006.
Flight Safety An above-standard level of flight safety features among the traditional values
that CSA guarantees to its customers, business partners and employees. The safety principle, as
an unambiguous operating priority, is not only formally incorporated into principal company
documents, such as the Operations Manual, but has become an essential part of corporate
culture.
Czech Airlines has a fully functional Accident Prevention and Flight Safety Programme that complies with
the demanding requirements of the European aviation regulation JAR-OPS 1. The most important
provision is the flight data monitoring programme, which has already been in use for a long time even
though it is not required under JAR-OPS 1 and L 13 regulations until 1 January 2005.
An important step in improved safety in the scope of the Less Paper Cockpit project was the introduction
of portable computers for use by flight crews (for computing B737 flight parameters directly on board).
This project has paved the way for a more sophisticated method of flight control. Moreover, it will soon
minimize paper documentation carried and kept in the aircraft.
Marseilles, Milan, Montreal, Moscow, Munich, New York/J. F. Kennedy, New York/Newark, Oslo, Ostrava, Paris, Riga, Rome, Samara, Sliac, Sofia, Split, St Petersburg, Stockholm, Stuttgart, Tallinn, Tatry/Poprad, Tel Aviv, Thessalonica, Toronto, Venice,
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Passenger Safety The safety of CSA’s passengers has always been a priority
Quality and Safety of Flight and Ground Operations Within the framework of internal and
for every employee of the company.
external assurances of safety and the quality of flight and ground operations for both Czech
Airlines and supplying and cooperating organizations, an Operations Quality System department
Czech Airlines, together with all civil air transport operators in the world and in
has been in existence at CSA since 1999. Its objective is to fulfil the requirements of JAR-OPS 1035 by
Europe, introduced strict security measures immediately after the 2001 events in
regular and effective monitoring of safety standards observance in all operations. Maximum independence
the United States. As a part of this, there are still thorough security checks of all
was secured for this department in 2003 by subordinating it directly to the President of CSA.
bags and surveillance of loaded luggage on the higher-risk routes to the United
States and to Israel.
In order to verify the safety and quality standards defined by the Czech Civil Aviation Authority and by the
Company itself, 33 internal audits and 40 inspections were carried out. Gradually, joint standards of the
In the interests of maximum passenger safety, CSA has been using security
SkyTeam Alliance were added and a completely new process was established for the systemic evaluation
personnel on flights to crisis areas. In the past such security details fell within the
of CSA’s service suppliers, especially in the areas of code-share and wet-leasing cooperation and in
competence of the Czech police, but since 1998 it has been carried out by
ground handling. In 2003, 25 service suppliers were checked. This process is reciprocal, so that while
a security agency.
Czech Airlines has been checking safety and the quality of services provided by its suppliers, for which it is
ultimately responsible, cooperating carriers have been checking the quality of services and safety of CSA
Now, in accordance with the National Security Programme for the protection of
operations. In 2003, Czech Airlines went through an extensive and comprehensive audit by its SkyTeam
civil aviation against acts of unlawful interference (“NSP”) and under a decision of
Alliance partners, as well as by Aeroflot, and 10 audits of ground handling and cargo. Throughout the
the National Security Council, a special police unit has been set up that will
year, CSA actively participated in checking the fuel quality and the aircraft de-icing process within existing
provide armed security escorts on Czech Airlines planes in cases of acknowledged
IFQP and DAQCP pools.
potential security risks.
Under the NSP and the Directive of the European Parliament and Council
Safety Training for Flight Crews In June 2003, the Civil Aviation Authority of the Czech Republic,
2320/2002 (“EU Directive”), the CSA Security Programme will be modified as of
having verified CSA’s compliance with the requirements of JAR-FCL and JAR-STD 1A regulations,
a set date with respect to securing passenger safety (more thorough checks of
renewed its Authorization of CSA as a Type Rating Training Organization (TRTO) and certificate
luggage and passengers using the most up-to-date technology) as well as with
of competence for the B737-400/500 flight simulator. Czech Airlines is the only company in the
regard to the quality and extent of security training for CSA personnel.
Czech Republic providing type training of flight crews in Type Rating & MCC, LVO-CAT II/III, Type Rating
Instructor and Synthetic Flight Instructor for aircraft ATR 42/72, B737 3/4/500 and A310. Again, this
confirmed the high professional level of the training programmes, instructors and training equipment,
and ultimately proves the high safety standard of CSA flight crews’ work.
Vienna, Vilnius, Warsaw, Yerevan, Zagreb, Zürich, Amsterdam, Athens, Baku, Barcelona, Beirut, Belgrade, Berlin, Birmingham, Bologna, Bratislava, Brno, Brussels, Budapest, Bucharest, Cairo, Cologne, Colombo, Copenhagen, Cork, Dortmund, Dubai,
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Quality and Safety of Aircraft Maintenance Maintenance of CSA aircraft
To be able to provide maintenance to aircraft registered in the United States of America and maintenance
is the responsibility of the Technical Division. It holds an internationally
of aircraft components that might be installed into these planes, our Technical Division strove to receive
acknowledged certificate authorizing an organization to maintain aircraft
an authorization pursuant to the FAR-145 regulation. For this purpose, a special manual was prepared.
(and aircraft components) pursuant to regulation JAR-145. For the purpose
Based on the satisfactory result of audits carried out at Czech Airlines by inspectors of the Federal
of authorizing the company as an air transport operator pursuant to
Aviation Administration (FAA), the Technical Division received a Foreign Maintenance Station
JAR-OPS 1 regulation (Air Operator Certificate), the Division has also been
authorization pursuant to regulation FAR-145 (No CLEY877C). Having the two most significant and
certified by the Civil Aviation Authority of the Czech Republic according to
internationally acknowledged authorizations, from JAA and FAA, Czech Airlines has been able to offer
Chapter M of this regulation (Maintenance). Authorization to provide
and provide maintenance work for customers from various territories.
maintenance and to operate air transport was given to CSA as the first
company in the Czech Republic (CAA CZ 001, CZ-1).
The Technical Division’s quality system is the responsibility of the Department of Quality Assurance and
Technical Control (ZJK). In order to ensure the quality of aircraft and plane components maintenance, and
In 2003, preparations began for entry to the European Union, including transfer
consequently the safety of aircraft operation, the department has been using a method of direct checking
from JAA regulations to those of the newly established European Aviation Safety
of completed work (through its section of technical inspection, TK) and a method of verifying quality
Agency (EASA). The first stage concerns regulations Part-145, Part-147, Part-66,
system efficiency and adherence to specified procedures (an activity of the quality assurance section, ZJ).
Part-M and Part-21, which take effect in the Czech Republic in 2004.
In addition to checks of prescribed items of maintenance, TK inspectors also carry out random checks, the
results of which they report both to responsible workers and to their own superiors. TK inspectors use the
Technical Inspection Reporting system to report discovered deficiencies, to provide feedback to
responsible persons, and to ensure that the relevant rectification measures are taken.
The main instruments of the quality assurance section (ZJ) are audits: internal audits for testing the
Technical Division quality system, and external audits for testing adherence to the quality requirements
CSA makes of its suppliers. In the second half of 2003, ZJ started to carry out audits in the CSA Training
Centre. The operations of the Quality Assurance and Technical Control Department have been influenced
by cooperation within SkyTeam, as evidenced by the creation and use of joint standards for the inspection
of suppliers.
Dublin, Düsseldorf, Edinburgh, Ekaterinburg, Frankfurt, Gothenburg, Hamburg, Hannover, Helsinki, Istanbul, Karlovy Vary, Kiev, Kosice, Krakow, Kuwait, Larnaca, Ljubljana, London/Heathrow, London/Stansted, London/Gatwick, Luxembourg, Madrid,
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As a reciprocal measure, the Technical Division is supervised by its customers, the
The CSA Training Centre as a School of Engineering In 2003, the Training Centre again
Civil Aviation Authority of the Czech Republic and the American Federal Aviation
passed tough audits conducted by the Civil Aviation Authority, thus defending its certification as
Administration (FAA).
a maintenance training organization, pursuant to regulation JAR-147, which it was awarded in
2002 as the first such organization in the Czech Republic.
In 2003, within its inspection activities, ZJK made 26 technical inspection reports and
42 internal audits (of which 21 dealt with procedures, 5 with aircraft maintenance
The JAR-147 organization is a technical school authorized to train and test aircraft maintenance
and 14 with maintenance of aircraft components), plus 24 external audits at
personnel for organizations certified according to JAR-145. Such a training organization must employ
suppliers of work/services. Likewise, audits by external organizations – supervising
experienced and qualified instructors, guarantee high standards of training equipment, and publish and
authorities and customers – were conducted. These included three audits by the
continuously update the MTOE (Maintenance Training Organization) training manual. The MTOE manual
Civil Aviation Authority (plus two in-flight inspections), 2 FAA audits and 5 audits
contains detailed information on training organization, training structure and procedures used, an
conducted by customers.
overview of courses offered and a summary of its quality assurance system.
The authorization includes all types of aircraft in the Czech Airlines fleet plus the B737-NG. Therefore, the
Training Centre is certified not only to provide the training of CSA’s own technical personnel but also to
offer its free capacity to external customers from other airlines.
Manchester, Marseilles, Milan, Montreal, Moscow, Munich, New York/J. F. Kennedy, New York/Newark, Oslo, Ostrava, Paris, Riga, Rome, Samara, Sliac, Sofia, Split, St Petersburg, Stockholm, Stuttgart, Tallinn, Tatry/Poprad, Tel Aviv, Thessalonica,
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Regularity of Operations
Regularity and timeliness are among CSA’s priorities. In this respect, it does
In 2003, CSA airplanes made a total of 54,758 takeoffs, which is a year-on-year increase of 10.8%. Of
not lag behind other respectable European carriers. The proportion of
those, 22,406 flights were delayed, which is a negative 30.3% increase over 2002. The average delay
delays for reasons that may be influenced is generally low and does not
period per flight increased from 9.3 to 12.6 minutes.
exceed the 15% limit. At the same time, it is important to note that when
delays do occur, CSA always provides its customers with top-notch services
This year-on-year trend was caused primarily by a period of social unrest in the Company, culminating in
in accordance with the SkyTeam Alliance standards and thus strives
organized coercive activities by selected groups of employees that had a direct effect on the regularity of
to eliminate the inconvenience caused by the delay, whether CSA is
operations. In the period from May up to July 2003, Czech Airlines’ AEA regularity rating among
responsible or not.
European airlines dropped to the very bottom of a notional chart to 24th or 25th place of 25 monitored
companies.
This negative trend was reversed between October and December, when the effects of systematic
measures aimed at the proactive management of CSA operations began to show. The measures were
taken by the operating board as the highest operational management authority, composed of five
members of company management, including the Company’s president. These measures resulted in
a conspicuous jump to 9th or 10th position in the AEA ranking.
Toronto, Venice, Vienna, Vilnius, Warsaw, Yerevan, Zagreb, Zürich, Amsterdam, Athens, Baku, Barcelona, Beirut, Belgrade, Berlin, Birmingham, Bologna, Bratislava, Brno, Brussels, Budapest, Bucharest, Cairo, Cologne, Colombo, Copenhagen, Cork,
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The Environment
The most notable capital investment in the period under review, destined
From the perspective of eliminating the environmental impact of CSA activities, the increased effectiveness
to have a significant impact on the Company’s environmental profile in the
of processes in the neutralizing station that clean waste waters from the plating shop has had a significant
future, was the construction of the new cargo terminal, completed at the
effect. Crucial pollution indicators (cadmium, chromium and cyanide concentrations) now continuously
end of 2003. The new building provides much safer conditions for handling
and with considerable reserves meet limits stipulated by the relevant water ordinance and the sewage
cargo transported by air, including goods classified as dangerous, which, in
system code of Prague-Ruzynû Airport. Operation of the previous underground device for pre-cleaning
case of spillage, could cause considerable environmental damage.
industrial wastewater at CSA has been discontinued for good. Oil-separating equipment used by the shop
to wash and degrease aircraft parts prior to maintenance has been replaced by a local flotation
wastewater-treatment plant installed in the shop. The new water-treatment station was given a long test
run, including a controlled test to check its efficiency under an extreme operational load, and was put
into permanent operation during 2003.
In the period under review, the Company decided to get rid of the last open aircraft systems functioning
with substances that damage the ozone layer (halons). These devices, which guarantee the transparency
of the cockpit windows under extreme weather conditions, are being replaced by new instruments that
do not use halons.
The proportion of sorted waste from airplanes (waste produced by passengers) was kept at the same
level, as was the share of waste conveyed for further processing for financial compensation (secondary
raw materials conveyed for treatment and reuse – paper, scrap metal and especially packaging waste:
glass, aluminum and plastics). The volume of waste generated is more or less in line with the growth in
Generation of waste in 2003 compared to the same period of 2002
the numbers of passengers carried.
Type of waste
2002
1st to 4th
quarter
2003
1st to 4th
quarter
Change
coefficient
Volume of mixed communal waste, in kilograms
467,280
511,520
1.09
Volume of hazardous waste, in kilograms
460,267
630,778
1.37
Volume of other waste, in kilograms
1 577,196
1,518,203
0.96
Total volume of waste, in kilograms
2,504,743
2,660,501
1.06
Note: The change coefficient expresses the proportion of values for the period reviewed and of values for
the comparable period of 2002.
Dortmund, Dubai, Dublin, Düsseldorf, Edinburgh, Ekaterinburg, Frankfurt, Gothenburg, Hamburg, Hannover, Helsinki, Istanbul, Karlovy Vary, Kiev, Kosice, Krakow, Kuwait, Larnaca, Ljubljana, London/Heathrow, London/Stansted, London/Gatwick,
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53
CSA pays increasing attention to the optimization of takeoff and landing procedures
In 2003, the Company used a total of 267,887 litres of class I de-icing liquid and 24,035 of class II liquid to
so that the impact of air traffic on inhabitants living in the airport’s vicinity, who
de-ice its own airplanes and the aircraft of its contractual partners. Specific consumption of de-icing liquids
are especially sensitive to this, is decreased. The results showing the trend of
per treated plane in 2003 was approximately 146 litres of class I de-icing liquid and 13 litres of class II
continuing decline in noise incidents caused by CSA aircraft at Prague Airport are
de-icing liquid. The weather, which dictates the consumption of de-icing liquids, was very bad in 2003.
detailed in the table on this page. In the period under review, there were no cases
In the period under review, 12 (three more than in 2002) incidents of leaks of water-harmful substances
of fuel leakage from airborne CSA airplanes.
into the environment were intercepted thanks to the system of leak monitoring. Although the overall
During 2003, the airplanes consumed 226,255.7 cubic metres (181,004.56 tonnes)
number of leak cases was higher, the volume of leaked substances decreased by 40% from 2002.
of fuel. Specific consumption was 3.56 kg/100 persons carried per flight kilometre,
or 2.58 kg/100 persons of available seat capacity per flight kilometre. Compared
Very good results in managing medium-sized stationary sources of environmental pollution had been
to 2002, the Company managed to reduce total fuel consumption by 5% while
achieved as far back as in 2000, and were successfully maintained in 2003. All medium-sized air pollution
the overall supply and output increased. Specific fuel consumption to transport
sources in operation meet stipulated emissions limits by a considerable margin. CSA does not operate any
100 persons a distance of one kilometre was reduced by 22% from 2002.
large-scale stationary sources of air pollution. However, consumption of extraction gasoline was assessed
as a serious problem, and this will be one of the environmental priorities in the next period.
Noise limits exceeded by CSA airplanes at Prague-Ruzynû Airport
Year
In cooperation with the Czech Airport Authority, it was discovered that a source of old environmental
Number
of movements
(takeoffs and landings)
Number
of noise
incidents
% of noise
incidents
of all aircraft
movements
2001
38,496/100%
272/100%
0.71/100%
conduct a risk analysis of the influence of this pollution on the environment and public health, and this
2002
48,319/125.5%
229/84.2%
0.47/66.2%
will determine CSA’s further steps in this matter.
2003
52,754/137%
196/72.1%
0.37/52.1%
pollution localized in the vicinity of Hangar F, and monitored for a long time, has been a two-chamber
tank for aircraft fuel sludge and thinners, not used since 1995. In the upcoming period, experts will
To evaluate the environmental impact of CSA operations, the overall trend in the use of natural resources
Consumption of energy and media in the period under review
compared to the same period of 2002
was prepared by comparing 2002 and 2003.
Units
Volume 2002
Volume 2003
Change index
Results achieved in 2003 confirm that the strategic goal set by Czech Airlines management in relation to
kWh
12,911,000
13,511,200
1.05
the company’s environmental profile, which can be formulated as our intention to reduce the
Water
cu. m
71,206
74,626
1.05
environmental impact of company activities while simultaneously increasing production, has been met for
Gas
cu. m
1,267,900
1,327,730
1.05
GJ
65,186
59,615
0.91
l
238,114,500
226,255,700
0.95
Electricity
Heat
Aircraft fuel
the third consecutive year.
Luxembourg, Madrid, Manchester, Marseilles, Milan, Montreal, Moscow, Munich, New York/J. F. Kennedy, New York/Newark, Oslo, Ostrava, Paris, Riga, Rome, Samara, Sliac, Sofia, Split, St Petersburg, Stockholm, Stuttgart, Tallinn, Tatry/Poprad, Tel Aviv,
Thessalonica, Toronto, Venice, Vienna, Vilnius, Warsaw, Yerevan, Zagreb, Zürich, Amsterdam, Athens, Baku, Barcelona, Beirut, Belgrade, Berlin, Birmingham, Bologna, Bratislava, Brno, Brussels, Budapest, Bucharest, Cairo, Cologne, Colombo,
The Avia Av-14, produced under licence, made its bow in 1957. It first took to the skies with the registration code OK-LCB, covering
the Prague-Brno route. CSA aircraft have borne the OK identification code since 1930, when the International Aviation Commission decided
to change the registration codes of civil aircraft to match the telegraph codes assigned to each country.
Copenhagen, Cork, Dortmund, Dubai, Dublin, Düsseldorf, Edinburgh, Ekaterinburg, Frankfurt, Gothenburg, Hamburg, Hannover, Helsinki, Istanbul, Karlovy Vary, Kiev, Kosice, Krakow, Kuwait, Larnaca, Ljubljana, London/Heathrow, London/Stansted,
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Personnel Management and Training
People working in Czech Airlines have one common interest – to maximize
Passenger satisfaction and a constantly expanding scope and quality of services – these are the priorities
passenger satisfaction. That is why CSA provides its employees with
of Czech Airlines in the new millennium. Indeed, the main motto of the company expresses the desire
essential training and education, good working conditions and a quality
that each passenger should feel “at home in the skies”.
living standard. In return, they are expected to display a professional and
proper relationship with customers, to be fully engaged and willing to use
In 2003, CSA had an average of 4,543 employees, which is 88 more than in the previous year.
all of their knowledge and skills in the interests of a top airline company.
The number of newly hired employees increased by 183 compared to the previous year. The biggest
increase was recorded in the cabin crew category – CC (by 53), FC (by 54), THP (by 45) and D (by 31). The
recruitment and hiring of employees was carried out in accordance with the company’s needs. Most
positions were filled through selection procedures.
The number of terminations decreased by 7 compared to 2002. A comparison of 2003 appointments and
terminations indicates that overall personnel grew by 198 in 2003.
598 employees in the following categories were newly hired
Category D
(worker)
Category THP
(administrative)
Category FC
(flight crew)
Category CC
(cabin crew)
Total
270
185
55
88
598
400 employees in the following categories terminated their employment
Category D
Category THP
Category FC
Category CC
Total
230
139
10
21
400
London/Gatwick, Luxembourg, Madrid, Manchester, Marseilles, Milan, Montreal, Moscow, Munich, New York/J. F. Kennedy, New York/Newark, Oslo, Ostrava, Paris, Riga, Rome, Samara, Sliac, Sofia, Split, St Petersburg, Stockholm, Stuttgart, Tallinn,
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Salary Policy The average salary at CSA in 2003 was CZK 33,562.
57
However, the eight-month vacuum in the validity of the collective agreements had no impact on employees
as far as the social programme is concerned. During the entire period, it continued without any change.
Social Development and Benefits From the perspective of maintaining
a favourable social environment, 2003 was a very demanding year for the
Benefits provided in 2003:
company. The validity of the collective agreement expired on 31 March 2003, and
– Pension funds
lengthy disputes regarding the number of new agreements resulted in tension
– Employee air tickets
between CSA management and trade unions. The threat of strike was averted
– Subsidized material and wage costs incurred by the canteen plus a contribution of CZK 7 per main
only after the procedure agreement was signed on 17 June 2003, but the
course (from 1 December 2003, when the new collective agreement became valid, the contribution was
precarious situation inside the Company had a considerable and visible impact on
decreased to CZK 5)
CSA’s performance. As a consequence of the Go Slow campaign, Czech Airlines
– Social assistance in cases of extraordinary life situations
dropped to the bottom of the scale of airline carriers as measured by the indicator
– Insurance of air crew members covering the loss of a licence for health reasons
of delayed departures.
– A range of foreign, domestic and children’s recreational activities
– Contribution for camps for children with health problems
The new management strove to create a trusting negotiating atmosphere, and these
– CSA sports and special-interest clubs
efforts were crowned by the signing of one joint and six individual collective
– Accident insurance beyond the legal requirement for air crews and selected professions
agreements in November 2003. This prevented an escalation of internal problems,
– Insurance of health costs on business trips
and a cordial relationship between management and the trade unions was
– Preventive rehabilitation for air crews
established with good prospects for the future.
Benefits offered from 1 December 2003:
In spite of the agreed growth in salaries, collective negotiations managed to retain
the originally planned volume of wage funds. In this connection, the management
– Transportation in cases where employees are called up to do their job out of schedule at a time when
no public transport is available
of Czech Airlines pledged to carry out a radical review and to overhaul the existing
– Use of drinking water machines for CSA employees at selected stations
wage rules and employee bonus system.
– Possibility of using a contribution for capital life insurance and an extra bonus
– Contributions for children’s camps amounting to CZK 1,500 per child per calendar year
Tatry/Poprad, Tel Aviv, Thessalonica, Toronto, Venice, Vienna, Vilnius, Warsaw, Yerevan, Zagreb, Zürich, Amsterdam, Athens, Baku, Barcelona, Beirut, Belgrade, Berlin, Birmingham, Bologna, Bratislava, Brno, Brussels, Budapest, Bucharest, Cairo,
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Training of CSA Employees In 2003, the Training Centre carried out
Air Crew Personnel 2003 was significant for the Flight Operations Division, not only because it
1,777 training activities for 12,555 CSA staff participants and 1,831 external
was the 80 th Anniversary of CSA’s founding. There were many important changes in the
customers.
organization and management of flight operations and in the system of supervision for Czech
Airlines operations.
Compared to 2002, the total volume of training increased by 18% and the
The Flight Operations Division successfully passed audits carried out by the SkyTeam Alliance, Lufthansa
number of trained persons by 54%.
and Aeroflot, as well as regular inspections by aviation authorities monitoring the safety and quality of
As in the previous year, the greatest emphasis was placed on training which
CSA flight operations.
focused on safety assurance and quality of services.
The Czech Airlines cabin crew team received an award in the prestigious Outstanding Service Award
In 2003, the Training Centre successfully complied with prescribed requirements
category, given by OAG for extraordinary effort in the humanitarian sphere for their involvement during
and its certificates and authorizations were renewed:
floods in the Czech Republic.
– Certificate CZ/147-001 maintenance training organization, pursuant to regulation
Number of employees A significant event influencing the number of employees accepted as members
JAR-147
– Accreditation for training of the safety programme in civil aviation
of air crews in 2003 was the acquisition of another long-haul airplane and an increase in the number of
– IATA accreditation – CSA Centre for IATA/UFTAA Training
aircraft for medium-haul routes. In the second half of the year, the number of newly hired employees was
affected by the 2004 plans to develop the aircraft fleet, which is now the largest in CSA’s history.
Subjects of training in 2003
12
13 14
1
11
2
3
10
9
8
4
7
6
1
2
3
4
5
6
7
Safety
Quality
Environmental protection
Airport operation
Airline systems
Aircraft maintenance
Ground technology
18%
1%
2%
19%
6%
8%
11%
8
9
10
11
12
13
14
Information technology
Sales and marketing
Administration
Languages
Personal development
IATA
Conferences
7%
2%
7%
8%
3%
6%
2%
2003
2002/2003
Cabin crews
761
7.6%
88
Flight crews
386
15.9%
55
1,147
8.2%
143
Air crews total
Newly hired
5
Cologne, Colombo, Copenhagen, Cork, Dortmund, Dubai, Dublin, Düsseldorf, Edinburgh, Ekaterinburg, Frankfurt, Gothenburg, Hamburg, Hannover, Helsinki, Istanbul, Karlovy Vary, Kiev, Kosice, Krakow, Kuwait, Larnaca, Ljubljana, London/Heathrow,
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Training of air crews In 2003, members of air crews, apart from basic training
High use of the B737 flight stimulator was recorded – 5,448 hours, of which 2,066 hours were sold (dry
required by regulations JAR-OPS 1, JAR-FCL 1 and L1 necessary to receive and
leased) to external customers. The most important of these were the airline companies Fischer Air, Travel
retain qualifications for the flight staff, went through training focused on
Service, Aerosvit, Airzena, Sky Europe and Slovak Airlines.
improving customer service (e.g. standards of service, methodology of work with
the customer, frequent flyer programme) and training aimed at mastering new
Employees of the Air Crews Training Department made a substantial contribution to the success of the
information technologies.
Worldwide Flight Simulator Engineering & Maintenance Congress (FSEMC), held in Prague during
September 2003.
Utilization of air crews 2003 was a turning point in the effectiveness and utilization of air crews.
Quantitative indicators in accordance with AEA methodologies confirmed a rise in average flight hours for
Ground training of cabin crews
air crews.
12,000
People
Courses
Hours
10,711
10,000
8,000
6,402
6,000
4,000
2,324
2,000
819
0
175
CSA
1,128
External
Ground training of pilots
Training of CSA pilots on flight simulators
7,000
People
Courses
Hours
Hours of computer-based training
6,382
6,000
5,000
4,000
2,891
3,000
1,672
2,000
1,000
0
370 70
726
A310
1,498
167
B737
2,858
2,640
1,868
645
107
ATR
509
845
74
External
3,200
Hours
3,067
2,400
1,600
1,368
1,108
800
0
A310
B737
ATR
London/Stansted, London/Gatwick, Luxembourg, Madrid, Manchester, Marseilles, Milan, Montreal, Moscow, Munich, New York/J. F. Kennedy, New York/Newark, Oslo, Ostrava, Paris, Riga, Rome, Samara, Sliac, Sofia, Split, St Petersburg, Stockholm,
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Studies for Professional Pilots – a Successfully Continuing Project Bachelor studies – with
Average flight hours according to AEA
an airline pilot specialization – continued at the Czech Technical University in Prague during
2002
2003
2002 – 2003
AEA mean 2002
Cabin crews
722
789
9.3%
640
Flight crews
555
616
11%
572
2003. In connection with this study programme, management of the Flight Department is preparing
procedures for the competitive selection for students of the Czech Technical University in Prague to
be held in April 2004. The results of this selection process will indicate how successful the first group
of students was and provide feedback for potential modifications to training programmes.
Flight hours according to AEA for 2003 will be available in October 2004.
The studies, which have elicited much interest, are geared toward the training of university-educated
professional pilots for air carriers. The programme of studies is derived from the qualification requirements
that are newly formulated and standardized for European Union countries and incorporated into JAR-FCL 1
Average flight hours (pilots)
regulations defining flight personnel qualifications. The university study programme has been set up so
Pilots
Average flight hours AEA
800
572
600
555
616
that students receive a comprehensive bachelor education and simultaneously complete the preparation
required by the Czech Civil Aviation Authority to take theoretical exams leading to an airline pilot’s
licence. During the programme, students are given an opportunity to take practical pilot training at an
approved flight school. The number of students in classes corresponds with the planned development of
400
the Czech Airlines aircraft fleet and is a part of CSA’s human resources planning.
200
Financing is the joint responsibility of three entities entering the system in the following order:
0
1. The state – expenses for theoretical university preparation, initial stage of training.
2003
2002
2. The participant – financing the second stage out of his/her own sources.
3. CSA – providing a promise of employment to assist in securing a bank loan.
Average flight hours (cabin crews)
800
Cabin crew members
Average flight hours AEA
789
722
640
600
Through this cooperation, CSA experts help teach specialized subjects and provide professional
supervision of the quality of practical training in recommended flight schools. CSA also offers professional
internships as well as observation flights and assists in assigning and completing diploma thesis work.
400
This is the first time that Czech Airlines has demonstrated a new approach to creating a comprehensive
200
0
system of pilot recruiting and training.
2002
2003
Stuttgart, Tallinn, Tatry/Poprad, Tel Aviv, Thessalonica, Toronto, Venice, Vienna, Vilnius, Warsaw, Yerevan, Zagreb, Zürich, Amsterdam, Athens, Baku, Barcelona, Beirut, Belgrade, Berlin, Birmingham, Bologna, Bratislava, Brno, Brussels, Budapest,
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Ownership Interests
Czech Airlines has significant ownership and control, as defined by the Commercial
Subsidiary Companies of Czech Airlines
Code, in the following companies:
CSA Airtours a.s.
Kolejní 2, 160 00 Praha 6
Company
CSA’s ownership share
CSA Airtours a.s.
100%
SLOVAK AIR SERVICES s.r.o.
100%
AMADEUS MARKETING CSA, s.r.o.
65%
Registration number: 61860336
Registered at the Municipal Court in Prague, Section B, Entry 2929
Established 1 January 1995
CSA Services, s.r.o.
100%
CSA Support s.r.o.
100%
The travel agency CSA Airtours provides its customers with active and passive tourist services, specializing
Slovenská konzultaãná firma, s.r.o. v likvidaci* )
100%
in individual tours, business trips, incentive tourism, congresses, conferences and special trips for athletes.
*) The company entered liquidation proceedings based on a decision of the Czech Airlines Board of
Directors; this should be registered in the Commercial Register of the Bratislava District Court in 2004.
The company achieved considerable growth in 2003, as seen in the 45% increased sales in comparison
with the previous year. Despite the complicated international situation related to the war in Iraq, the
company managed to penetrate new markets and intensively increased the number of its clients by 60%.
Czech Airlines also owns minority interests in WALTER a.s. and Boeing
A very important event was the International Federation of Trade Unions conference in Prague, which
âeská s.r.o.
was organized by CSA Airtours for more than 900 participants from all over Europe. The very good results
permitted investments not only into an improved working environment for employees, but also into
technologies connected with projects planned for 2004.
Summary of CSA subsidiaries’ results in 2003
Audited pretax data for 2003 (CZK in thousands)
The company’s focus on the higher market segment and on providing individual and group travel services
based on customers’ demands require increased attention to quality, which will become even more
Equity
Registered
capital
Revenue
Profit/loss
CSA Airtours a.s.
6,123
1,000
136,777
2,549
to introduce international quality standards based on ISO 9001:2000. The application of this system was
SLOVAK AIR SERVICES s.r.o.*)
6,897
200
36,620
-3,911
concluded with a successful certification audit in autumn 2003. The audit was carried out by the British
14,036
585
56,185
8,890
company BVQI (Bureau Veritas Quality International) and concentrated on all the types of services offered
CSA Services, s.r.o.
469
270
1,070
36
CSA Support s.r.o.
6,988
4,390
81,348
191
AMADEUS MARKETING CSA, s.r.o.
important with the Czech Republic’s entry to the European Union. All these reasons resulted in a decision
by CSA Airtours, resulting in both Czech and British accreditation. The company currently has 25 employees.
*) Figures are in Slovak crowns.
Bucharest, Cairo, Cologne, Colombo, Copenhagen, Cork, Dortmund, Dubai, Dublin, Düsseldorf, Edinburgh, Ekaterinburg, Frankfurt, Gothenburg, Hamburg, Hannover, Helsinki, Istanbul, Karlovy Vary, Kiev, Kosice, Krakow, Kuwait, Larnaca, Ljubljana,
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CSA Support s.r.o.
SLOVAK AIR SERVICES s.r.o.
Ruzynû Airport, K Leti‰ti street, 160 08 Praha 6
M. R. ·tefánika Airport, 820 01 Bratislava
Registration number: 25674285
Registration number: 31373844
Registered at the Municipal Court in Prague, Section C, Entry 60140
Registered at the District Court in Bratislava 1, section for Limited Liability Companies (s.r.o.)
Established 15 June 1998
Established 7 July 1994
The company was established to provide cleaning for buildings used by Czech
The activity of the company focuses mainly on the ground handling of aircraft (technical service – the
Airlines and for CSA aircraft, as well as cleaning for foreign companies at
activities of aircraft mechanics, passenger, cargo and check-in services, loading and unloading of aircraft,
Prague-Ruzynû Airport. At present, it provides cleaning for all CSA premises, as
aircraft cleaning, arranging all in-flight catering needs). In other fields, the company provides unscheduled
well as for external clients. For example, the Theatre of the Estates building, part
ground transportation for passengers and cargo, customs and clearance activity, the sale of air
of the National Theatre in Prague, has been cleaned by this company since 2003.
transportation documents (air tickets, air waybills). The company carries out its activities in Bratislava,
Since 2000, CSA Support has extended its activities into transportation, arranging
Ko‰ice and Pie‰Èany. SLOVAK AIR SERVICES has 62 regular employees.
the delivery of delayed baggage.
The company cleared / checked in 1,238 aircraft in 2003. Apart from scheduled routes, it also served 29
Considerable changes were made in the company’s activities in 2003 compared
charter flights. Under authorization granted by the Aviation Office of the Slovak Republic, SLOVAK AIR
with previous years. The CSA Support began providing transportation of transfer
SERVICES is entitled to provide air maintenance service. On this basis, it carried out maintenance for 208
passengers to the Kladno transit hotel and transportation of CSA aircrews to their
CSA aircraft in 2003 (ATR-42, ATR-72) in the scope of “line checks”. Other activities provided by the
aircraft. The registered capital of the company was increased by an investment in
company’s staff include: transportation of CSA crews from/to hotels, delivery of Slovak Airlines crews,
kind (buses) worth CZK 4.29 million. Since September 2003, the activity of the
deliveries of delayed baggage, aircraft cleaning for the fleet of the Ministry of the Interior of the Slovak
company has been extended to cover freight transport.
Republic and for other airlines.
In connection with enlargement of the Czech Airlines aircraft fleet, the number of
A few external influences unfavourably impacted on the company’s activities and operations. One of the
CSA aircraft departures also increased. There were greater demands on aircraft
major problems was a decline in the number of CSA scheduled flights to/from Bratislava. Other negative
cleaning. To ensure the quality and punctuality of aircraft cleaning, the company
impacts were higher energy prices and rent changes. Exchange-rate losses due to fluctuations between
increased the number of cleaning workers. Problems faced by the company
the Slovak crown and U.S. dollar came to SKK 1.316 million.
include a relatively high employee turnover and an absenteeism rate that hovers
As a consequence of the need to eliminate these negative influences, the company took measures
around 13%.
collectively known as the Restructuring Programme. The company did not manage to offset the shortfall
CSA Support exceeded its planned revenues for services by CZK 3.87 million in
in revenues, however, despite measures taken to economize on costs, reduce the workforce and freeze
2003, the greatest share in which comes from the centres for transportation and
bonus payments. The company ended 2003 with a loss.
aircraft cleaning.
As of 31 December 2003 there were 315 regular employees.
London/Heathrow, London/Stansted, London/Gatwick, Luxembourg, Madrid, Manchester, Marseilles, Milan, Montreal, Moscow, Munich, New York/J. F. Kennedy, New York/Newark, Oslo, Ostrava, Paris, Riga, Rome, Samara, Sliac, Sofia, Split,
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AMADEUS MARKETING CSA, s.r.o.
Gestin Centrum, V Celnici 1040/5, 110 00 Praha 1
Registration number: 49680030
Registered at the Municipal Court in Prague, Section C, Entry 21718
Established on 7 July 1993
AMADEUS MARKETING CSA is the representative of the Amadeus global distribution
As in previous years, the company operated during 2003 in a very competitive market environment for
system (GDS) for the Czech and Slovak Republics. GDS Amadeus is a worldwide
reservation systems. Despite the difficult situation in the market, the company achieved very good results.
computer network responsible for the provision, reservation and sale of tourism
The year-on-year increase in the number of connected terminals in the Czech and Slovak travel agencies
services, especially air tickets, hotel accommodation, car rentals, boat tickets, and
came to 17%, the number of air ticket printers increased by 12% and the number of sites (travel agency
travel insurance.
offices with GDS Amadeus) rose by 4.6%. The volume of reservations taken by travel agencies via the
The major activities of AMADEUS MARKETING CSA include selling access to
Amadeus System in the Czech and Slovak Republics increased by 7.9% and 8.7% respectively. AMADEUS
Amadeus GDS and providing training as well as technical and user support to
MARKETING CSA’s market share in the Czech and Slovak Republics rose by 5.8% and 4.5% respectively.
customers (which are travel agencies in the Czech and Slovak Republics). Not least,
This growth occurred at a time when total reservations on the markets in the Czech and Slovak Republics
the company is an important technological partner for travel agencies, and, through
remained at their 2002 levels.
new products, it increases the opportunities open to the present tourist industry.
A major business achievement for the company in 2003 was the acquisition and connection of the largest
Slovak travel agency, CKM 2000 Travel, the five branches of which use the modern Vista tool. AMADEUS
The positive economic result for 2003 was supported by the launch of new
MARKETING CSA has 15 employees.
products:
– Vista – a unique reservation tool providing customers with a selectable and very
pleasant user environment.
– Travel Choice – an advanced tool that takes into account the preferences of
travel agencies’ most important customers.
– An on-line reservation tool based upon the Amadeus API interface – development
of the state-of-the-art booking tool for travel agencies’ www pages.
– Amadeus Learning City – training and information centre for the Amadeus GDS
that is accessible on the Internet at any time.
St Petersburg, Stockholm, Stuttgart, Tallinn, Tatry/Poprad, Tel Aviv, Thessalonica, Toronto, Venice, Vienna, Vilnius, Warsaw, Yerevan, Zagreb, Zürich, Amsterdam, Athens, Baku, Barcelona, Beirut, Belgrade, Berlin, Birmingham, Bologna, Bratislava, Brno,
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CSA Services, s.r.o.
Ruzynû Airport, K Leti‰ti street, 160 08 Praha 6
Registration number: 25085531
Registered at the Municipal Court in Prague, Section C, Entry 48439
Established 26 October 1996
CSA Services has long cooperated with Czech Airlines in catering, providing
specific catering services for individual non-airline events. In addition to upholding
the good reputation of the parent company among its clients (in relation to social
events for firms such as Microsoft and Unimex Group), CSA Services also aims to
supply high-quality CSA catering even beyond the air transport sphere. The firm
cooperates with Obecní dÛm (Municipal House) in Prague. In the upcoming years,
preference will be given to long-term cooperation with proven partners such as
Jahofrta and Charles University. It is worth mentioning the company’s services for
the 17th International Congress of Linguists, held in Prague in July 2003. The
extent of this cooperation is kept at a constant level with the possibility of
coordinated growth between the two companies.
All operations are managed by the company’s two principal executives.
Brussels, Budapest, Bucharest, Cairo, Cologne, Colombo, Copenhagen, Cork, Dortmund, Dubai, Dublin, Düsseldorf, Edinburgh, Ekaterinburg, Frankfurt, Gothenburg, Hamburg, Hannover, Helsinki, Istanbul, Karlovy Vary, Kiev, Kosice, Krakow, Kuwait,
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Financial Statements for the Years Ended 31 December 2003 and 2002
prepared in accordance with International Financial Reporting Standards
Contents
AUDITOR’S REPORT
GENERAL INFORMATION
INCOME STATEMENTS
BALANCE SHEETS
STATEMENTS OF CHANGES IN EQUITY
CASH FLOW STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
1. General
2. Summary of significant accounting policies
3. Revenue
4. Business and geographical segments
5. Other operating income
6. Cost of materials and services
7. Staff costs
8. Other operating expenses
9. Financial expenses
10. Earnings per share
11. Property, plant & equipment
12. Intangible assets
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67
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68
69
69
70
70
70
75
76
76
76
76
77
77
77
77
78
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
26.
27.
28.
29.
30.
31.
Financial investments
Unconsolidated subsidiaries
Related party transactions
Inventories
Other financial assets
Share capital
Reserves
Bank overdrafts and loans
Derivative financial instruments
Income tax
Obligation under finance leases
Other finance liabilities
Provisions
Contingent liabilities
Capital commitments
Operating lease arrangements
Retirement benefit plans
Long term contractual relationships
Subsequent events
79
79
79
80
80
80
81
81
82
83
84
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84
85
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85
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Auditor’s Report
Independent Auditor’s Report to the Shareholders of âeské aerolinie a.s.
Having its registered office at: Praha 6, Leti‰tû Ruzynû, 160 08
Identification number: 45795908
Principal activities: air transport of passengers and cargo
We have audited the accompanying balance sheets of âeské aerolinie a.s. (the “Company”) as of
31 December 2003, and the related statements of income, cash flows and changes in equity for the
years then ended. These financial statements are the responsibility of the Company’s management.
Our responsibility is to express an opinion on these financial statements based on our audits. The
financial statements as of 31 December 2002 were audited by another auditor who issued an
unqualified opinion on 10 June 2003.
Except for the areas, where the scope of our work was limited, as discussed in the following
paragraphs, we conducted our audits in accordance with International Standards on Auditing.
Those Standards require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit includes examining,
on a test basis, evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
The Company recognises fees related to the sold tickets as a component of revenues as at the date
of sale. A portion of these fees relates to future periods, in the maximum estimated amount of
USD 10.9 million as of the balance sheet date. The Company has recorded estimated payables and
provisions for this risk in the aggregate amount of USD 8.8 million.
The Company records as deferred income amounts collected from the sale of air tickets relating to
travel in future periods. The resulting foreign exchange rate differences and adjustments arising
from the allocation of revenues to other carriers are recorded in the income statement two years
following the sale of the ticket, rather than in the period in which the ticket was used.
The Company’s systems do not make it possible to accurately quantify the amounts referred to in
the previous two paragraphs. Given the nature of the Company’s system and procedures used by
the Company for keeping records of sold air tickets and related fees, we were unable to satisfy
ourselves as to the appropriateness of the balances of deferred income, provisions and related
income and expenses.
In our opinion, except for the effect of such adjustments, if any, as might have been determined to
be necessary in connection with the limitations referred to above, the financial statements present
fairly, in all material respects, the financial position of âeské aerolinie a.s. as of 31 December 2003,
and the results of its operations, cash flows and changes in equity for the years then ended in
accordance with International Financial Reporting Standards.
Without further qualifying our opinion we draw attention to the following matter.
As discussed in Note 2 to the financial statements, the balance sheet for the year ended
31 December 2002 was restated to reflect the correction of errors in the financial statements.
In Prague on 21 June 2004
Audit firm:
Deloitte & Touche spol. s r.o.
Represented by:
Michal Petrman, statutory executive
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General Information
Income Statements
for the years ended 31 December 2003 and 2002 – unconsolidated (USD ‘000)
Directors
Board of Directors:
Jaroslav Tvrdík (Chairman)
Katefiina Hobzová Chalupová
Jaroslav ·vábík
Peter Jusko
TomበHeczko
Supervisory Board:
Eduard Janota (Chairman)
Jifií Pos
Jaroslav Lorenc
Hana Pe‰ková
Pavel Such˘
Zlata Gröningerová
Pavel ¤eÏábek
Zdenûk Hrub˘
Du‰an Horák
Pavel Bém
Libor Luká‰ek
Jan Adam
Registered Office
Ruzynû Airport
160 08 Prague 6
Czech Republic
Auditors
Deloitte & Touche spol. s r.o.
T˘n 641/4
110 00 Prague 1
Czech Republic
Traffic revenues
Other operating income
Cost of materials and services
Staff costs
Depreciation
Other operating expenses
Foreign exchange differences
Notes
3
5
2003
563,024
110,269
2002
435,281
82,214
6
7
11
8
(459,145)
(102,423)
(58,038)
(21,671)
(4,039)
(331,295)
(66,652)
(57,625)
(26,430)
4,921
27,977
40,414
(8,974)
(2,913)
(12,008)
(2,201)
16,090
26,205
Profit from operations
Interest expense, net
Other financial expense, net
9
9
Profit before taxation
Income tax gain (expense)
22
3,408
(11,560)
Net profit for the year
10
19,498
14,645
Earnings per share (USD)
10
71.28
53.54
Notes 1 to 31 form part of these financial statements.
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Balance Sheets
as of 31 December 2003 and 2002 – unconsolidated (USD ‘000)
Notes
2003
2002
restated
ASSETS
Non-current assets
Property, plant and equipment, net
Intangible assets, net
Financial investments
Current assets
Inventories
Trade and other receivables, net
Tax receivables, net
Fuel purchase option
Restricted cash
Cash and cash equivalents
Total assets
Notes
2003
2002
restated
Capital and reserves
Share capital
Non-distributable reserves
Revaluation, net
Retained earnings
Profit for the period
18
19
19
19
10
Provisions for liabilities and charges
25
99,509
1,315
(2,752)
73,738
19,498
191,308
7,857
99,509
1,315
(3,754)
59,093
14,645
170,808
332
Non current liabilities
Interest-bearing loans and borrowings
Finance lease obligations
Deferred tax liability, net
20
23
22
37,698
156,711
30,751
225,160
30,741
189,734
30,822
251,297
24
20
165,090
6,085
104
33,023
7,223
211,525
635,850
135,270
6,140
29
31,639
9,813
182,891
605,328
EQUITY AND LIABILITIES
11
12
13
450,408
1,387
7,218
459,013
479,589
1,450
4,715
485,754
16
17
19,225
80,155
3,939
–
1,253
72,265
176,837
635,850
15,870
64,438
1,951
1,107
1,511
34,697
119,574
605,328
21
17
17
Current liabilities
Trade and other payables
Current portion of long term interest-bearing loans
Other payables
Finance lease obligations
Interest rate swap
Total equity and liabilities
Notes 1 to 31 form part of these financial statements.
23
21
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Statements of Changes in Equity
Cash Flow Statements
for the years ended 31 December 2003 and 2002 – unconsolidated (USD ‘000)
for the years ended 31 December 2003 and 2002 – unconsolidated (USD ‘000)
Balance at 1 January 2002
Adjustments (note 2)
Share
Non- Revaluation,
capital distributable
net
reserves
99,509
1,315
3,905
–
–
–
Retained
earnings
Total
39,896
19,197
144,625
19,197
Balance at 1 January 2002 – restated
Revaluation gain on available-for-sale shares (notes 13, 19)
Revaluation loss on interest rate swap (notes 19, 21)
Revaluation gain on commodity option (notes 19, 21)
Net gains and losses not recognised in the income statement
Profit for the year
99,509
–
–
–
–
–
1,315
–
–
–
–
–
3,905
(3,958)
(4,465)
764
(7,659)
–
59,093
–
–
–
–
14,645
163,822
(3,958)
(4,465)
764
(7,659)
14,645
Balance at 1 January 2003
Revaluation gain on available-for-sale shares (notes 13, 19)
Revaluation loss on interest rate swap (notes 19, 21)
Revaluation loss on commodity option (notes 19, 21)
Net losses not recognised in the income statement
Profit for the year
99,509
–
–
–
–
–
1,315
–
–
–
–
–
(3,754)
2,713
(611)
(1,100)
1,002
–
73,738
–
–
–
–
19,498
170,808
2,713
(611)
(1,100)
1,002
19,498
Balance at 31 December 2003
99,509
1,315
(2,752)
93,236
191,308
2003
16,090
2002
restated
26,205
58,038
8,233
(105)
8,974
91,229
57,625
(1,673)
(214)
14,209
96,152
Increase in receivables
Increase in inventories
Increase in payables
(16,433)
(3,416)
29,895
(10,388)
(2,134)
29,791
Cash generated by operations
Interest paid
Income tax paid
Net cash from operating activities
101,275
(9,457)
(12)
91,807
113,421
(15,788)
–
97,633
Cash flows from investing activities
Purchase of property, plant and equipment
Purchase of intangible assets
Purchases of investments
Proceeds from disposals of property, plant and equipment
Change of long-term deposits
Interest received
Net cash used in investing activities
(31,708)
(823)
(200)
2,489
258
(483)
(29,502)
(34,514)
(1,438)
–
817
(1,511)
1,579
(35,067)
Cash flows from financing activities
Change of borrowings
Change of finance lease liabilities
Net cash used in financing activities
6,902
(31,639)
(24,737)
(9,102)
(59,848)
(68,950)
37,568
34,697
72,265
(6,384)
41,081
34,697
Profit before tax
Adjustments for:
Depreciation and amortisation
Movement on provisions
Profit on sale of fixed assets
Interest expense (net)
Operating profit before working capital changes
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at 1 January
Cash and cash equivalents at 31 December
Notes 1 to 31 form part of these financial statements.
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Notes to the Financial Statements
for the years ended 31 December 2003 and 2002 – unconsolidated
1. GENERAL
âeské aerolinie a.s. (‘the Company’) is a joint-stock limited liability company registered and
domiciled in the Czech Republic. It is engaged in the air transport of passengers and cargo
principally in Europe, North America and the Far and Middle East, operating from its hub in Prague,
Czech Republic.
The Company was created as a joint-stock company from the former state-owned company
âeskoslovenské aerolinie s.p. on 1 August 1992.
The Company’s registered address is: Ruzynû Airport, 160 08 Prague 6, Czech Republic.
The financial statements were approved by the Board of Directors and authorized for issue on
21 June 2004.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of preparation
The financial statements have been prepared in accordance with International Financial Reporting
Standards (IFRS), which comprise standards and interpretations approved by the IASB.
These financial statements are presented in US dollars, which are considered by the Company’s
management to be the appropriate measurement and presentation currency. The US dollar is
widely acknowledged to be the functional currency of the airline industry and is also the currency in
which a large proportion of the Company’s transactions are denominated.
The financial statements have been prepared on the historical cost basis, except for the
measurement at fair value of derivative financial instruments and available-for-sale financial assets.
All amounts are presented in thousands of USD, unless stated otherwise.
Errors and changes in accounting policies
a) In prior years, the Company depreciated aircraft over a period of 12 – 15 years with a residual
value of 10 per cent of the cost. The aircraft should have been depreciated over a period of 18 –
20 years with a residual value of 10 per cent;
b) In prior years, the Company depreciated segments of assets where regular overhauls were
undertaken and capitalised over the useful lives of the aggregate assets, while these items should
have been depreciated over the period to the next overhaul;
c) In prior years, the Company amortised expenses associated with financial leases (customs duties,
legal fees, etc.) from the moment the lease expired, while these fees should have been amortised
in line with the leased asset; and
d) In prior years, the Company reported incorrect balances of fixed assets as a result of an incorrect
re-translation of the cost.
The balance sheet as of 31 December 2002 was restated to reflect the above adjustments. The
income statement for the year ended 31 December 2002 was not restated as the impact of the
adjustments is not significant in 2002. The above adjustments related to 2002 were reflected in the
income statement for the year ended 31 December 2003, resulting in an additional depreciation
charge of USD 1,317 thousand in 2003.
Original balance as of 31 December 2002
a)
b)
c)
d)
Restated balance as of 31 December 2002
Property, plant & equipment
USD ‘000
460,392
87,811
(59,838)
(2,097)
(6,679)
479,589
Retained earnings
USD ‘000
39,896
87,811
(59,838)
(2,097)
(6,679)
59,093
Certain items are presented differently from previous periods. Comparable figures for previous
periods were restated to reflect the changes.
Reasons for non-consolidation
The results and individual assets and liabilities of the subsidiaries owned by the Company have not
been consolidated since management consider that the impact of consolidation would not be
material to financial statements of the Company (see note 14, 15).
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Revenue recognition
Revenues are recognised in the period to which they relate on an accruals basis.
The recognition of the Company’s revenues from airline transportation services comprises two basic
components:
– Revenues from the Company’s own air tickets;
– Revenues from the air tickets of other airline carriers used in the Company’s airlines.
In recognising revenues, the Company refers to the principles provided in the Revenue Accounting
Manual issued by the International Air Transport Association (IATA). The use of these principles is based
upon the Company’s membership in IATA and the mutual application of those principles by other airlines.
The Company recognises revenues through deferred income when an air ticket is issued. Collected
fare is allocated among individual air coupons on the basis of a number of criteria which include
a contractual arrangement between individual airlines and the established guidance of IATA.
This allocated fare is recognised to income when the transportation is provided, if the flight was
realised by the Company. In instances where the flight was realised by a partner company, the
allocated fare in respect of the relevant coupon is reversed from deferred income to payables.
With regard to companies with which the Company applies the ‘sampling’ accounting approach,
the Company allocates the fare among individual coupons on the basis of an extrapolation of
a representative sample in accordance with the IATA guidance. This extrapolation is subsequently
reviewed and adjusted by the airline.
Unused flight coupons are recorded to income after the elapse of two years from the issuance of
the air ticket.
Together with the fare, the Company collects numerous fees. The Company does not account for
the received fees on an accruals basis. The received fees are included in other operating income
when air tickets are sold. The Company pays these fees to Government authorities, airport
administration organisations (airport authorities) and partner airlines. The Company recognises
provisions and estimated payables as equal to estimated future payments.
Revenues from the sale of goods and services are recognised on the supply date or on a contractual
basis. Gains arising from long-term production contracts are recognised when the contract is
completed and billed on a basis set out in the underlying contract.
Interest income is accrued on a time basis, by reference to the principal outstanding and at the
interest rate applicable.
When the inflow of cash or cash equivalents is deferred beyond the standard collection period, the
revenue is recognised at the fair value of the consideration that is determined by discounting all
future receipts using an imputed rate of interest. The difference between the fair value and the
nominal amount of the consideration is recognised as interest revenue on a time proportion basis
that takes into account the effective yield on the asset.
Segment reporting
Management considers that the Company comprises only one business segment, the provision of
airline services. Other significant activities – maintenance, ground and similar services are closely
related to airline services.
The Company monitors revenues according to geographical segments according to the place where
the air ticket is sold. Assets and expenses cannot be reliably allocated to individual segments.
Frequent flyer programme
Accruals have been made for the estimated cost of providing free travel in exchange for redemption
of points earned by members of the Frequent Flyer Programme. Costs accrued include incremental
fuel, catering servicing costs and cost of redemption with other partners. These costs do not include
opportunity cost.
Property, plant and equipment
Land received during privatisation is stated at a valuation that was performed under privatisation
rules in force at the time the joint stock company was established on 1 August 1992.
Buildings, plant and equipment are stated at cost less accumulated depreciation.
Tangible fixed assets include assets with an estimated useful life greater than one year and an
acquisition cost greater than CZK 5,000 on an individual basis.
Tangible fixed assets are stated at cost which includes purchase cost, freight charges, customs
duties and other expenses attributable to the acquisition. Tangible fixed assets produced by the
Company are valued at internal production costs which include direct material and payroll costs
incurred in production and an element, if any, of indirect expenses relating to production, and are
assessed on an individual basis.
Segments of assets where regular overhauls are undertaken are depreciated over the period to the
next overhaul.
Assets in the course of construction for operation or administrative purposes, or for purposes not
yet determined, are carried at cost, less any identified impairment loss. Cost includes professional
fees and, for qualifying assets, borrowing costs capitalised in accordance with the Company’s
accounting policy. Depreciation of these assets, on the same basis as other property assets,
commences when the assets are brought into use.
The gain or loss arising on the disposal or retirement of an asset is determined as the difference
between the sales proceeds and the carrying amount of the asset and is recognised in the income
statement.
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Spare engines and similar aircraft parts are capitalised and depreciated over the operational lives of
the aircraft to which they relate. Replacement spares and all other costs relating to the maintenance
and overhaul of aircraft and engines are charged to the income statement on consumption and as
incurred respectively.
Depreciation is calculated to write off the cost or valuation, less residual value (for aircraft only), on
a straight-line basis over the estimated lives of the assets. Residual values and operational lives are
reviewed annually. Land is not depreciated.
Intangible assets
Intangible fixed assets include assets with an estimated useful life greater than one year and an
acquisition cost greater than CZK 5,000 on an individual basis.
Purchased intangible fixed assets are stated at cost comprising purchase cost and expenses
attributable to acquisition, less accumulated amortisation and any recognised impairment losses.
Internally generated intangible fixed assets are not included in the accounting records if those
assets do not meet IAS 38 recognition criteria.
Financial leases
Leases of aircraft are classified as finance leases whenever the terms of the lease transfer
substantially all the risks and rewards of ownership to the lessee. All other leases are classified as
operating leases. The amount included in tangible fixed assets represents the present value of the
amounts payable during the lease term. The corresponding obligation, reduced by the appropriate
proportion of lease payments made, is included in current and non-current liabilities as appropriate.
The interest element of lease payments made is charged to the profit and loss account so as to
produce a constant period rate of charge. Interest on short term borrowings and other acquisition
costs to finance deposits for new aircraft are capitalised and depreciated over the service lives of the
aircraft from the date they are put into use.
Operating leases
Payments under all other lease arrangements, known as operating leases, are charged to the profit
and loss account as they occur, over the period of the lease on accrual basis.
The Company regularly reviews its lease arrangements, if they are modified, to determine whether
they meet finance lease criteria.
Depreciation
Type
Software
Other intangibles
Buildings
Plant and equipment
Vehicles
Fixtures and fittings
Type
Airbus A310
Boeing 737
ATR 42
ATR 72
Cabin modifications (all aircraft)
Estimated useful economic lives (range)
2
over the term of the contact
30
4 to 15
4 to 8
4 to 15
Estimated useful economic lives
20
20
18
18
8
Residual value in %
10
10
10
10
–
Aircraft and engine overhaul expenditure
Costs in respect of overhauls of airframe and aero-engines are capitalised and are being amortised
over the maintenance cycle period on a systematic basis. No provisions for such future costs are
included in these financial statements, as the Company has no legal or constructive obligation in
respect of these liabilities.
The Company identifies components of fixed assets where significant overhauls are conducted.
These assets are depreciated on a straight line basis over the period to the next overhaul.
Impairment
At each balance sheet date, the Company reviews the carrying amounts of its tangible and
intangible assets to determine whether there is any indication that those assets have suffered an
impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in
order to determine the extent of the impairment loss (if any). Where it is not possible to estimate
the recoverable amount of an individual asset, the Company estimates the recoverable amount of
the cash-generating unit to which the asset belongs.
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The recoverable amount is the greater of net selling price and value in use. In assessing value in use,
the estimated future cash flows are discounted to their present value using a pre-tax discount rate
that reflects current market assessments of the time value of money and the risks specific to the asset.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its
carrying amount, the carrying amount of the asset (cash-generating unit) is reduced to its
recoverable amount. An impairment loss is recognised as an expense immediately.
Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating
unit) is increased to the revised estimate of its recoverable amount, but so that the increased
carrying amount does not exceed the carrying amount that would have been determined had no
impairment loss been recognised for the asset (cash-generating unit) in prior years. A reversal of an
impairment loss is recognised as income.
Investments in unconsolidated subsidiaries
Investments in subsidiaries are recorded at cost less recognised impairment losses.
Inventories
Inventories are valued at the lower of cost and net realisable value after making due provision for
obsolete items. Cost comprises all expenditures incurred in bringing each product to its present
condition and location.
Net realisable value is based on estimated selling prices less further costs expected to be incurred in
bringing the stocks to completion and disposal.
Inventory is issued out of stock using the FIFO (first in, first out) method.
Finished products, semifinished goods and internally produced inventory are stated at internal costs
incurred. Internal costs incurred include direct material and payroll costs and an element of indirect
expenses relating to production, and are assessed on an individual basis.
In recognising provisions, the Company reviews its inventory that has not been used for more than
three years. If the Company’s count of inventory held in stock highlights the existence of such
inventory and its potential selling value is lower than the stock value, the inventory is written down
to the lower price through provisioning.
Cash and cash equivalents
Cash and cash equivalents consist of cash on hand and in the bank, with a maturity of less than
three months.
Restricted cash represents cash (term accounts) whose use is restricted in the long term and
maturity exceeds three months.
Financial instruments
Financial assets and financial liabilities are recognised on the Company’s balance sheet when the
Company has become a party to the contractual provisions of the instrument.
Trade receivables
Short term receivables are stated at their nominal value as reduced by appropriate allowances for
estimated irrecoverable amounts.
Long term receivables are stated at fair value of consideration receivable.
Investments in securities
Investments in securities are recognised on a trade-date basis and are initially measured at cost.
At subsequent reporting dates, debt securities that the Company has the expressed intention and
ability to hold to maturity (held-to-maturity debt securities) are measured at amortised cost, less any
impairment loss recognised to reflect irrecoverable amounts. The annual amortisation of any
discount or premium on the acquisition of a held-to-maturity security is aggregated with other
investment income receivable over the term of the instrument so that the revenue recognised in
each period represents a constant yield on the investment.
Investments other than held-to-maturity debt securities are classified as available-for-sale, and are
measured at subsequent reporting dates at fair value. Unrealised gains and losses are recognised
directly in equity, until the security is disposed of or is determined to be impaired, at which time the
cumulative gain or loss previously recognised in equity is included in the net profit or loss for the period.
In determining fair value of securities, the Company refers to the price quoted on stock exchanges.
If these prices are not available, the Company uses a reasonable estimate to arrive at the fair value.
The Company has no trading securities.
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Bank borrowings
Interest-bearing bank loans and overdrafts are recorded at the proceeds received, net of direct issue
costs. Finance charges, including premiums payable on settlement or redemption, are accounted
for on an accrual basis and are added to the carrying amount of the instrument to the extent that
they are not settled in the period in which they arise.
Short term part of bank loans is classified as current liabilities.
Trade payables
Trade payables are stated at their nominal value.
Equity instruments
Equity instruments are recorded at the proceeds received, net of direct issue costs.
Derivative financial instruments
Derivative financial instruments, which comprise interest rate swaps and fuel purchase options, are
initially recorded at cost and are re-measured to fair value at subsequent reporting dates.
Changes in the fair value of derivative financial instruments that are designated and effective as
cash flow hedges are recognised directly in equity. Amounts deferred in equity are recognised in
the income statement in the same period in which the hedged firm commitment or forecasted
transaction affects net profit or loss.
Changes in the fair value of derivative financial instruments that do not qualify for hedge
accounting are recognised in the income statement as they arise.
Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated, or
exercised, or no longer qualifies for hedge accounting. At the time, any cumulative gain or loss on
the hedging instrument recognised in equity is retained in equity until the forecasted transaction
occurs. If a hedged transaction is no longer expected to occur, the net cumulative gain or loss
recognised in equity is transferred to net profit or loss for the period.
Taxation
The charge for current tax is based on the results for the year as adjusted for items that are nonassessable or disallowed. It is calculated using tax rates that have been enacted or substantively
enacted by the balance sheet date.
Deferred tax is accounted for using the balance sheet liability method in respect of temporary
differences arising from differences between the carrying amount of assets and liabilities in the
financial statements and the corresponding tax basis used in the computation of taxable profit.
Deferred tax liabilities are generally recognized for all taxable temporary differences and deferred
tax assets are recognised to the extent that it is probable that taxable profits will be available
against which deductible temporary differences can be utilised. Such assets and liabilities are not
recognised if the temporary difference arises from goodwill (or negative goodwill) or from the initial
recognition (other than in a business combination) of other assets and liabilities in a transaction that
affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to
the extent that it is no longer probable that sufficient taxable profit will be available to allow all or
part of the asset to be recovered.
Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is
realised or the liability is settled. Deferred tax is charged or credited in the income statement,
except when it relates to items credited or charged directly to equity, in which case the deferred tax
is also dealt with in equity.
Deferred tax assets and liabilities are offset when they relate to income taxes levied by the same
taxation authority and the Company intends to settle its current tax assets and liabilities on a net basis.
Provisions
Provisions are recognised when the Company has a present obligation as a result of a past event
which it is probable will result in an outflow of economic benefits that can be reasonably estimated.
Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of qualifying
assets, which are assets that necessarily take a substantial period of time to get ready for their
intended use or sale, are added to the cost of those assets, until such time as the assets are
substantially ready for their intended use or sale. Investment income earned on the temporary
investment of specific borrowings pending their expenditure on qualifying assets is deducted from
the cost of those assets.
All other borrowing costs are recognised in net profit or loss in the period in which they are
incurred.
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Foreign currencies
Transactions denominated in foreign currencies are translated into US dollars at exchange rates
prevailing at the time of the transaction. During the period, the Company uses monthly IATA
(International Air Transport Association) exchange rates.
Financial assets and liabilities denominated in foreign currencies are translated into US dollars at the
exchange rates of Czech National Bank ruling at the balance sheet date. Profits and losses arising
on exchange are included in net profit or loss for the period.
The trends in the most important exchange rates in relation to the US dollars are as follows:
Currency
Euro
CZK
Closing rate
at 31 December
2003
0.792
25.654
Average rate
Closing rate
for 2003 at 31 December
2002
0.886
0.954
28.227
30.141
Average rate
Closing rate
for 2002 at 31 December
2001
1.062
1.124
32.736
36.259
Average rate
for 2001
1.116
38.038
Retirement benefit costs
Contributions are made to the government's health retirement benefit and unemployment schemes
at the statutory rates in force during the year based on gross salary payments. The cost of social
security payments is charged to the profit and loss account in the same period as the related salary
cost. The Company has no further pension or post retirement commitments.
Government grants
The Company obtains grants covering staff retraining costs. These grants are recognised to the
income statement over the periods necessary to match them with the related costs and are
deducted in reporting the related expense.
Estimates
The preparation of financial statements in conformity with International Financial Reporting
Standards requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.
Cash flow
The cash flow statement is prepared using the indirect method. Cash equivalents include current
liquid assets easily convertible into cash in an amount agreed in advance, i.e. all current financial
assets with the exception of restricted financial assets.
3. REVENUE
An analysis of the Company’s traffic revenue from its continuing activity of airline services is as
follows (USD ‘000):
Regular transportation
Charter services
Other services
Sale of goods
Other services include revenues from handling, technical and catering services.
Sale of goods includes revenues from duty free and other product sales.
There were no discontinued activities in 2003 or 2002.
2003
479,339
24,210
33,525
25,950
563,024
2002
367,466
22,627
25,252
19,936
435,281
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4. BUSINESS AND GEOGRAPHICAL SEGMENTS
6. COST OF MATERIALS AND SERVICES
Geographical segments
Segment revenue by geographical area (based on location of customer) is as follows (USD ‘000):
(USD ‘000)
Czech Republic
Western Europe
Eastern Europe
Middle and Far East
USA and Canada
Total revenues
2003
188,570
207,367
64,098
53,267
49,722
563,024
2002
148,510
153,505
51,995
44,666
36,605
435,281
Most of the assets and employees of the company are located in the main location – Ruzynû
Airport, Prague.
Landing, handling and navigation fees
Consumed materials and fuel
Operating leases
Repairs and maintenance
Travel expenses
Energy
Other services
2003
253,476
101,760
26,892
19,352
8,098
2,510
47,057
459,145
2002
183,543
74,624
19,870
14,844
6,111
2,268
30,035
331,295
2003
75,637
66
23,569
1,910
1,241
102,423
2002
48,150
49
17,567
–
886
66,652
7. STAFF COSTS
(USD ‘000)
5. OTHER OPERATING INCOME
(USD ‘000)
Departure, handling and other fees
Income from the sale of fixed tangible assets and material, net
Departure fee
Income from operational handling
Other income
2003
81,827
2,688
12,022
8,239
5,493
110,269
2002
61,982
1,121
8,098
5,889
5,124
82,214
Wages and salaries
Bonuses of statutory bodies
Statutory health insurance and social security
Provision for outstanding vacation days
Other social cost
Directors’ and executives’ remuneration
Directors’ and executives’ remuneration totalled USD 2,733 thousand (2002 – USD 1,891 thousand).
No loans, guarantees or other benefits were granted to directors or executives in 2003, 2002 or
2001.
The average number of employees during the year was as follows:
Operational
Administration
2003
3,870
673
4,543
2002
3,796
659
4,455
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8. OTHER OPERATING EXPENSES
11. PROPERTY, PLANT & EQUIPMENT
(USD ‘000)
(USD ‘000)
2003
10,693
1,735
5,715
1,114
2,414
21,671
2002
13,986
1,609
3,119
546
7,170
26,430
Interest income
Interest expense
Derivatives
2003
483
(5,015)
(4,442)
2002
543
(8,660)
(3,891)
Interest expense, net
(8,974)
(12,008)
Other financial expense, net
(2,913)
(2,201)
Insurance
Write-off of receivables, provisioning
Final settlement of air tickets
Fines
Other
9. FINANCIAL EXPENSES
Freehold Aircraft held
and land under finance
buildings
leases
Aircraft
owned
Plant &
equipment
Total
Cost or valuation:
Balance as at 1 January 2003
Restatements
Balance as at 1 January 2003 – restated
Additions
Transfer
Disposals
Balance as at 31 December 2003
80,456
(4,903)
75,553
2,485
–
(3,383)
74,655
609,884
12,072
621,956
2,155
(148,369)
(1,421)
474,321
55,579
1,052
56,631
933
148,369
(617)
205,316
135,383
(14,106)
121,277
24,787
–
(4,491)
141,573
881,302
(5,885)
875,417
30,360
–
(9,912)
895,865
Accumulated depreciation:
Balance as at 1 January 2003
Restatements
Balance as at 1 January 2003 – restated
Charge for the year
Transfer
Disposals
Balance as at 31 December 2003
21,096
2,049
23,145
1,464
–
(1,032)
23,577
280,878
(14,505)
266,373
30,460
(89,009)
(1,421)
206,403
42,453
(5,513)
36,940
13,892
89,009
(617)
139,224
76,483
(7,112)
69,371
11,341
–
(4,459)
76,253
420,910
(25,082)
395,828
57,158
–
(7,529)
445,457
Net book value at 31 December 2002 – restated
52,408
355,583
19,691
51,906
479,589
Net book value at 31 December 2003
51,078
267,918
66,091
65,321
450,408
2003
57,098
940
58,038
2002
57,074
551
57,625
(USD ‘000)
Other financial expense includes banking fees, fees for guarantees and similar financial fees.
10. EARNINGS PER SHARE
Depreciation (USD ‘000)
Earnings per share are calculated as the net profit attributable to ordinary shareholders divided by
the weighted average number of ordinary shares outstanding during the period.
Depreciation of property, plant and equipment
Depreciation of intangible assets (note 12)
Net profit attributable to shareholders (USD ‘000)
Weighted average ordinary shares (pcs) (note 18)
Earnings per share (USD)
The Company has no outstanding instruments with potential dilutive effect.
2003
19,498
273,551
71.28
2002
14,645
273,551
53.54
In previous years, property, plant and equipment was translated into US dollars from CZK fixed
assets register at the weighted average historic rates. In 2002 the Company implemented an asset
register in US dollar values for all property, plant and equipment, based on the exchange rates at
the historic date of acquisition. Differences arising have been reflected with the adjustments of
opening balances in 2002.
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Land and buildings include land totalling USD 1,987 thousand (2002 – USD 2,008 thousand). The
Company had no significant down payment for new buildings (2002 – USD 3,167 thousand).
Plant & equipment includes aircraft components at cost USD 21,841 thousand (2002 – USD
20,462 thousand) and accumulated depreciation USD 12,240 thousand (2002 – USD 10,793 thousand).
The Company contracted for the delivery of eight Fairchild Dornier 728 JETs in 2001. Due to the
bankruptcy of Fairchild Dornier in 2002 a decision regarding the new regional fleet strategy was
postponed. A provision of USD 400 thousand was made in 2002 for non-recoverable down
payments paid to Fairchild Dornier in 2001. The Company reported total provisions of USD
1,203 thousand in 2003 (2002 – USD 400 thousand).
No depreciation is provided in respect of certain plant and equipment and assets under
construction with a total cost of USD 30,241 thousand (2002 – USD 9,996 thousand).
No interest was capitalised in 2003, 2002.
The Company has pledged fixed assets in total cost USD 512,290 thousand and accumulated
depreciation of USD 210,093 to secure bank loans.
Aircraft overhaul costs
Aircraft and engine overhaul costs totalling USD 3,088 thousand (2002 – USD 3,299 thousand
million), included in aircraft leased/owned above, have been capitalised in the year. The net book
value of aircraft and engine overhaul costs at 31 December 2003 was as follows:
(USD ‘000)
2003
14,222
(5,022)
9,200
2002
13,172
(4,280)
8,892
Software
Other
intangibles
Total
Cost or valuation:
Balance as at 1 January 2003
Additions
Transfers
Disposals
Balance as at 31 December 2003
4,428
823
622
(140)
5,733
692
–
(622)
(5)
65
5,120
823
–
(145)
5,798
Accumulated depreciation:
Balance as at 1 January 2003
Charge for the year
Transfers
Disposals
Balance as at 31 December 2003
3,052
880
618
(140)
4,410
618
–
(618)
–
–
3,670
880
–
(140)
4,410
Net book value as at 31 December 2002
1,376
74
1,450
Net book value as at 31 December 2003
1,322
65
1,387
Cost
Accumulated depreciation
Net book value
12. INTANGIBLE ASSETS
(USD ‘000)
Aircraft
The Company’s fleet at the year-end comprised the following aircraft:
Aircraft type
Number of aircraft in service at 31 December 2003
Owned
On balance
Off balance
aircraft
sheet
sheet
(finance)
(operating
leases)
leases)
Airbus A310
2
–
1
Boeing 737-400 *)
–
–
3
Boeing 737-400
–
5
3
Boeing 737-500
–
10
2
ATR 72
4
–
–
ATR 42
1
2
2
Total
7
17
11
Total
Future
deliveries
On order
Average
age (years)
3
3
8
12
4
5
35
1
3
–
2
–
2
8
–
–
–
–
–
–
–
12.21
11.03
6.05
9.25
11.79
9.04
9.19
*) Aircraft with increased seat capacity.
The future deliveries relate to one Airbus A310, three Boeing 737/400, two Boeing 737/500 and
two ATR42 being acquired under an operating lease contract (see note 28).
The ownership of the two finance leased A310 aircraft was transferred to the company during
February and March 2003.
In previous years, intangible assets were translated into US dollars from CZK fixed assets register at the
weighted average historic rates. In the 2002, the Company implemented an asset register in US dollar
values for all intangible assets, based on the exchange rates at the historic date of acquisition.
Differences arising have been reflected with the adjustments of opening balances in 2002.
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Name of subsidiary
13. FINANCIAL INVESTMENTS
(USD ‘000)
Carrying value
2003
2002
83
83
5,982
3,635
6,065
3,718
France Telecom shares – at cost (on conversion)
France Telecom shares – adjustment to fair value
France Telecom shares – at fair value
Others
Total
883
927
6,948
4,645
Investments in securities comprise a holding of France Telecom shares that were converted from
SITA Dutch Foundation certificates during 2001. The carrying amount of the France Telecom shares
is based on the market value as at year-end.
Other investments includes share in subsidiaries.
14. UNCONSOLIDATED SUBSIDIARIES
Name of subsidiary
Place
Proportion
of incorp’n of ownership
& operation
interest
2003 & 2002
AMADEUS MARKETING
Czech
65%
CSA s.r.o.
Republic
CSA Services s.r.o.
Czech
100%
Republic
CSA Airtours a.s.
Czech
100%
Republic
CSA Support s.r.o.
Czech
100%
Republic
SLOVAK AIR SERVICES s.r.o.
Slovak
100%
Republic
SKF s.r.o. *)
Slovak
100%
Republic
Principal Total assets,
activity
net
2003
USD ‘000
Marketing
935
services
Catering
23
servicing
Tour
894
Services
Cleaning
615
Services
Handling
594
services
Consulting
5
services
Equity
2003
USD ‘000
547
Cost of
investment
2003
USD ‘000
15
Cost of
investment
2002
USD ‘000
13
18
10
10
239
39
38
272
158
3
269
5
4
6
3
2
230
70
*) SKF s.r.o. is in the winding-up process. At 18 March 2004 tax office agreed to the erasure of SKF s.r.o. from the companies register.
AMADEUS MARKETING CSA s.r.o.
CSA Services s.r.o.
CSA Airtours a.s.
CSA Support s.r.o.
SLOVAK AIR SERVICES s.r.o.
SKF s.r.o. *)
Total assets, net
2003
USD ‘000
935
23
894
615
594
5
Equity
2003
USD ‘000
547
18
239
272
269
6
Profit (loss)
2003
USD ‘000
250
1
63
2
(153)
–
Revenues
2003
USD ‘000
2,190
42
5,332
3,170
1,124
–
Expenses
2003
USD ‘000
1,844
40
5,232
3,164
1,243
–
15. RELATED PARTY TRANSACTIONS
Group transactions
The Company entered into transactions during the year with the following related parties. These
transactions were made on normal commercial terms.
Transactions, receivables and payables as at 31 December 2003 due from these related parties were
as follows (USD ’000):
Related party
AMADEUS MARKETING CSA s.r.o.
CSA Services s.r.o.
CSA Airtours s.r.o.
CSA Support s.r.o.
SLOVAK AIR SERVICES s.r.o.
Nature of transactions
Services
Services
Services
Services
Services
Sales
570
23
111
223
48
975
Purchases
3
–
87
2,998
271
3,359
Receivables
17
3
16
25
105
166
Payables
–
–
6
294
–
300
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16. INVENTORIES
Cash and cash equivalents
(USD ‘000)
2003
352
6,703
64,270
940
72,265
(USD ‘000)
Raw materials and consumables
Work in progress
Finished goods
2003
16,763
95
2,367
19,225
2002
13,864
57
1,949
15,870
Raw materials and consumables are stated net of provisions of USD 693 thousand (2002 – USD
632 thousand).
17. OTHER FINANCIAL ASSETS
Cash, stamps and vouchers
Current accounts
Term deposits (less than three months)
Cash in transit
2002
394
5,538
16,573
12,192
34,697
Bank balances and cash comprise cash and short-term deposits held by the treasury function. The
carrying amount of these assets approximates to their fair value.
The restricted cash are held in blocked accounts as guarantees relating to rental contracts and various
agreements for the supply of goods and services. The restricted cash generate interest income.
At 31 December 2003, 2002, the Company had not used any unsecured bank overdraft facilities
agreed with Komerãní banka, âSOB, Dresdner Bank, âeská spofiitelna and Raiffeisenbank.
Trade and other receivables
(USD ‘000)
Trade debtors
Prepayments
Receivables from employees
Other receivables
2003
66,056
11,022
1,343
1,734
80,155
2002
34,971
28,271
724
472
64,438
18. SHARE CAPITAL
Number
of shares authorized
and in issue
Ordinary shares of CZK 10,000 each
The average credit period taken on airline service sales is 30 days. Trade debtors are stated net of
provisions for doubtful debts of USD 2,717 thousand (2002 – USD 2,882 thousand), which have
been calculated based on the ageing of overdue receivables.
Prepayments include receivables of USD 3,499 thousand (2002 – USD 3,545 thousand). These
principally represent prepayment for operating leases of aircraft. The prepayments are refundable if
the Company meets the criteria of the agreement at the expiration of the operating lease.
As of 31 December 2003, the Company carried no receivables with maturity over five years.
The Directors consider that the carrying amount of trade and other receivables approximates to
their fair value.
273,551
Allotted, called up
and fully paid
2003
2002
USD ‘000
USD ‘000
99,509
99,509
There were no movements in the share capital of the Company in either the 2003 or 2002
reporting periods.
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The shareholdings and voting rights of the shareholders as at 31 December 2003 were:
Shareholders
National Property Fund of the Czech Republic
National Property Fund of the Slovak Republic
Czech consolidation agency (Česká konsolidační agentura)
Czech insurance company (Česká pojištovna a.s.)
Endowment fund (Nadační fond)
City of Prague
City of Bratislava
Number of shares
154,359
670
94,617
11,854
1,339
8,034
2,678
273,551
Shareholding
%
56.43
0.24
34.59
4.33
0.49
2.94
0.98
100.00
20. BANK OVERDRAFTS AND LOANS
Voting rights
%
48.99
0.29
40.49
5.07
0.57
3.44
1.15
100.00
Interest-bearing loans
2003
USD ‘000
30,741
13,042
43,783
2002
USD ‘000
36,881
–
36,881
2003
USD ‘000
6,085
9,142
21,180
7,376
2002
USD ‘000
6,140
6,085
18,210
6,446
Less: amounts due within one year (shown in current liabilities)
43,783
(6,085)
36,881
(6,140)
Amounts due after one year
37,698
30,741
Long term loans
Long term loans
Currency
Security
Maturity
USD
EUR
Aircraft
Cargoterminal
2003 – 2009
2003 – 2009
The long-term loans are repayable as follows:
19. RESERVES
Retained loss including profit of current period under CAS was 994,128 thousand CZK in 2003
(2002 – 1,064,728 thousand CZK) and therefore there are no funds available for distribution to
shareholders pursuant to the legal regulations effective in the Czech Republic.
Non-distributable reserves – statutory reserve fund created in accordance with the Commercial
Code through a mandatory allocation of profit under CAS. This fund can only be used to offset
accumulated losses.
The movement in fair value in 2003 of USD 2,347 thousand (2002 – USD 5,760 thousand) has been
reflected in the statement of equity, net of deferred tax.
Revaluation gain (loss)
Available-for-sale shares
Interest rate swaps
Commodity options
2003
USD ‘000
4,474
(7,226)
–
(2,752)
2002
USD ‘000
1,761
(6,615)
1,100
(3,754)
On demand or within one year
In the second year
In the third to fifth years
After five years
The Company has one loan that bears fixed interest. Interest attached to other loans is variable on
the basis of LIBOR or EURIBOR. The average level of interest in 2003 was 3.30 per cent p.a.
(2.67 per cent in 2002).
The directors consider that the carrying amount of interest bearing loans approximates to their fair value.
The main obligations of the loans are set out below. Any breach of these, or any of the other
thirteen obligations, may cause the loans to be cancelled.
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1. Regular reporting of financial results – in compliance with the Czech legislation and IFRS
standards
2. Reporting on changes in ownership structure
3. Reporting on the occurrence of an Event of Default or Suspension Event arising from some
contractual agreements
4. Prohibition of the payment of dividends in the case of late payments to the lessor/owner
5. Approval required for merger with another entity
6. Limits for levels of overdue liabilities
The Company did not breach any of these conditions in 2003 or 2002.
During 2003, the Company used short-term operating loans with an average interest rate of eight
per cent. The balance of loans was nil as of 31 December 2003 and 2002.
Hedging instruments
Interest rate swap (no. 1)
Interest rate swap (no. 2)
Interest rate swap
Start
date
Expiry
date
15. 5. 2001
14. 5. 2001
15. 6. 2007
15. 8. 2007
Market
value
2003
USD ‘000
(4,030)
(3,193)
(7,223)
Market
value
2002
USD ‘000
(5,531)
(4,282)
(9,813)
The Company uses the derivatives presented above as hedges and periodically reviews if hedge
accounting criteria are met.
Foreign currency risk
Foreign currency exposure on lease liabilities and other fleet operating costs is mitigated for cash-flow
purposes by a natural hedge as a large proportion of air travel revenues are transacted in US dollars.
The Company does not engage in hedging transactions to cover exchange rate fluctuations.
21. DERIVATIVE FINANCIAL INSTRUMENTS
The Company is routinely exposed to fluctuations in fuel prices, interest rates and exchange rates.
In recognition of this fact, it is Company policy (i) to balance any such risks internally as far as it is
possible, (ii) to control net positions in a way to produce the optimum effect on net income and (iii)
to hedge open positions wherever it is deemed necessary.
The Company does not trade any derivatives for short-term gains nor hold derivative positions for
speculative gains.
Price risk
The price risks associated with the fuel price trend (where fuel expenditure represents
approximately 25 % from cost of materials and services) were partially hedged in 2003 and 2002 by
means of spread options contracts which are entered into for each calendar year. These provide
a maximum fuel price per tonne and minimum fuel price per tonne on fuel costs. As of
31 December 2003 the Company had no open commodity derivative instrument.
Interest-rate risk
In order to avoid valuation risks arising from liabilities, financing is primarily carried out using
variable interest rates. In the strongly market-driven air travel business, this also provides an
additional protection aspect, since interest rates are usually also lower at times of weaker
competition. Interest-rate swaps are only agreed with partners of first class creditworthiness.
Credit risk
In the majority of cases, the sale of passage and freight documents is handled via agencies within
the sphere of influence of the International Air Transport Association (IATA). These agencies are
connected with country-specific clearing systems for the settlement of passage or freight sales.
Individual agents are checked by the particular clearing houses. The credit risk from sales agents is
relatively low due to their dispersion worldwide. Where the agreements upon which a payment is
based do not explicitly state otherwise, claims and liabilities arising between the airlines are usually
settled on a bilateral basis or via a Clearing House of IATA. Settlement takes place principally
through the balancing of all receivables and liabilities at regular monthly intervals, which
contributes to a significant reduction in the risk of non-payment. In individual cases, a separate
security may be required in the particular payment agreement for other transactions.
For all other payment relationships, depending upon the type and level of the particular payment,
security may be required or credit information/references obtained. Historical data from the business
relationship up until that point, in particular in relation to payment behaviour, may be used in an
effort to avoid non-payment. Provisions against receivables are made for recognised risks.
The credit risk from investments and derivative financial instruments arises from the danger of nonpayment by a contract partner. Since the transactions are concluded with contracting parties with
high credit ratings, the risk of non-payment is low. Loans to contracting parties of less certain credit
rating are only made if offset by assessable strategic advantages corresponding to the non-payment
risk, or if securities are provided.
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83
Liquidity risk
Liquidity in the Company is protected on the one hand by appropriate liquidity planning and on the
other through the financing structure, high financial stocks and sufficient short-term credit
facilities.
The liquid funds in a broader sense total approximately USD 78,330 thousand (2002 – USD
38,415 thousand), comprising cash and cash equivalents plus liquid available-for-sale financial
assets, without restricted cash (see note 17). Furthermore, open credit facilities of more USD
19,592 thousand are currently available (2002 – USD 5,659 thousand). The company’s operational
finance lease obligations are repayable in agreed monthly instalments and are funded by
operational receipts that are influenced by seasonable variations.
During the period the Company utilised the tax loss of previous years.
Statement of changes in equity:
Deferred income tax charge
2003
USD ‘000
2002
USD ‘000
12
(3,420)
(3,408)
–
11,560
11,560
3,349
3,348
There is no tax charge for the year, based on the loss per the statutory accounts, due to the tax
losses and investment relief available from prior years. Based on the results of the draft tax
computation for 2003, tax losses and investment relief available to be carried forward are
approximately USD 51.3 million (2002 – USD 50.1 million). These losses will expire between 2003
and 2009, as follows:
Year of expiry
Year ended 31 December 1996
Year ended 31 December 2001
Year ended 31 December 2002
Investment relief
2003
2008
2009
–
2003
USD ‘000
–
2,522
2,987
45,744
51,253
2002
USD ‘000
7,387
6,971
2,646
33,154
50,158
The charge for the year can be reconciled to the profit per the income statement as follows:
2003
USD ‘000
16,090
4,988
Effect of change of tax rate
Recognition of previously unrecognised deferred tax
Permanent differences
Income tax charge (income)
Profit before tax
Income tax charge at statutory rate
22. INCOME TAX
Income statement:
Current income tax charge
Deferred income tax charge (income)
Tax losses
2002
%
31.0
USD ‘000
26,205
8,124
%
31.0
(9,107)
(1,543)
2,254
(56.6)
(9.6)
14.0
–
–
3,436
–
–
13.1
(3,408)
(21.2)
11,560
44.1
Balance sheet
2003
2002
USD ‘000
USD ‘000
Deferred tax liabilities:
Difference between tax and accounting values of fixed assets
Valuation allowance to receivables and inventories
Revaluation of financial assets/liabilities to fair value
Tax losses
Provisions for vacation and financial risks
Other non tax provision and adjustment
(31,651)
313
(1,413)
1,543
576
(119)
(32,611)
–
2,132
–
–
(343)
Net deferred tax liabilities
(30,751)
(30,822)
A deferred tax asset from the investment relief has not been recognised due to the uncertainty as to
whether it can be utilised. Deferred taxation arising from tax losses was not recognised in the
previous years due to significant uncertainty over its realisation.
U
84
23. OBLIGATION UNDER FINANCE LEASES
24. OTHER FINANCE LIABILITIES
(USD ‘000)
Trade and other payables
Minimum lease
payments
Present value of
minimum lease
payments
2003
2002
2003
2002
36,020
106,615
56,966
36,046
118,433
83,268
33,023
100,952
55,758
31,639
107,674
82,060
199,601
237,747
189,734
221,373
(9,867)
(16,374)
–
–
189,734
221,373
189,734
221,373
Less: amounts due within one year (shown under current liabilities)
(33,023)
(31,639)
Amounts due after one year
156,711
189,734
Amount payable:
Within one year
Within two to five years
Due in more than five years
Less: future finance charges
Present value of lease obligations
2003
USD ‘000
76,384
2,102
4,787
4,057
76,580
673
507
165,090
Trade creditors and accruals
Advances receives
Payables to employees
Payables to public authorities
Prepaid air tickets
Accrued finance lease charges
Other payables
2002
USD ‘000
77,844
151
2,944
2,892
48,963
1,109
1,367
135,270
Trade and other payables principally comprise amounts outstanding for trade purchases and
ongoing costs. The average credit period taken for trade purchases is 20 days.
25. PROVISIONS
It was the Company’s policy to lease the significant part of its aircraft fleet under finance leases.
The average lease term is 10 to 12 years. For the year ended 31 December 2003, the average
effective borrowing rate was 1.84 per cent p.a. (2002 – 1.61 per cent). Interest rates attached to
the leases are either fixed or variable on the basis of LIBOR. The interest rate is usually revised on
a quarterly basis.
All lease obligations are denominated in US dollars.
The fair value of the Company’s lease obligations approximates to their carrying amount.
The Company’s obligations under finance leases are secured by the lessor’s charge over the leased
assets.
Provisions for financial risks
Provisions for unused vacation days
Provisions for airport fees
Provisions
2002
USD ‘000
332
–
–
Charge for
provisions
2003
USD ‘000
58
2,010
5,457
Use of
provisions
2003
USD ‘000
–
–
–
Anticipated
year of use
2003
USD ‘000
390
2,010
5,457
332
7,525
–
7,857
*)
2004
2004
*) The anticipated year of use cannot be estimated with reasonable certainty.
Provisions for financial risk relate to a number of overseas lawsuits against the Company and
represent management’s best estimate of the likely outcome.
The provision for airport fees represents the estimated future payment of airport fees collected in
2003.
U
85
26. CONTINGENT LIABILITIES
29. RETIREMENT BENEFIT PLANS
Management is not aware of any significant contingent liabilities as of 31 December 2003, other
than those provided against in note 25.
Contingent liabilities arising from the Company’s impact on the environment:
The Company has prepared an environmental policy under which the impacts of its activities on the
environment are monitored specifically in the following areas:
– Treatment of solid and liquid waste;
– Air pollution;
– Noise from airline activities.
The Company is not aware of any breaches of applicable standards which may trigger significant
sanctions or any other charges.
Pension and other post-retirement benefits
In the Czech Republic there is a state pension system in addition to supplementary private pension
schemes. Generally, there are no pension schemes operated by employers and the Company does
not have any obligation to its employees following their retirement.
The Company is only obliged to contribute to government health, pension and unemployment
schemes during the term of employment. The Company has no obligation to contribute to these
schemes beyond the statutory rates in force. The contributions to these schemes are made on
a pay-as-you-go basis and are recorded in the profit and loss as a period expense.
As a result, the Company is not exposed to any post-retirement obligations in respect of its
employees and consequently, no pension liability accrual has been recognized in the accounts.
27. CAPITAL COMMITMENTS
30. LONG TERM CONTRACTUAL RELATIONSHIPS
As of 31 December 2003, the Company had no significant contractual capital expenditure commitments
(2002 – USD 25,466 thousand).
Sky Team Alliance
The principles of co-operation in the Sky Team Alliance with regard to objectives, brand usage and
mutual projects are documented in an Alliance Agreement. Details of the co-operation are
regulated by bilateral framework agreements with the individual members of the Sky Team
Alliance. These agreements have terms up to October 2010 and regulate co-operation projects,
network, frequent flyer programme and other operational matters.
28. OPERATING LEASE ARRANGEMENTS
At 31 December 2003, the Company had outstanding commitments under non-cancellable
operating leases, which fall due as follows (USD ‘000):
31. SUBSEQUENT EVENTS
Within one year
In the second to fifth years
After five years
2003
19,351
32,037
–
51,388
2002
18,387
22,363
–
40,750
Operating lease payments represent rentals payable by the Company for certain aircraft in the
Company’s fleet. Leases are negotiated for an average term of 5 years.
The Company is negotiating new operating leases for delivery of one Airbus A310, three Boeing
737/400, two Boeing 737/500 and two ATR42 aircraft in 2004.
Mrs. Zuzana ¤ezníãková and Mr. Petr JÛza were elected as members of the Board of Directors in 2004.
U
86
CSA commercial-traffic output in 1985 – 2003
Flights:
Km flown (thousands):
Hours Sold:
Number of passengers
carried (thousands):
Passenger kilometers
utilized – PSKM (millions):
Utilization of available
seating capacity (%):
TKM utilized (millions):
TKM goods, mail (millions):
Utilization of total
available capacity (%):
Total
IT
DT
Total
IT
DT
Total
IT
DT
1985
10,087.5
6,848.5
3,239.0
26,961.4
23,543.0
3,418.4
36,909.9
30,578.0
6,332.0
1986
10,404.0
6,949.5
3,454.5
27,334.6
23,740.8
3,593.8
37,810.8
31,084.2
6,726.6
1987
10,800.5
7,294.5
3,506.0
28,801.7
25,091.9
3,709.8
39,650.4
32,662.2
6,988.2
1988
10,998.5
7,376.0
3,622.5
30,016.0
26,119.9
3,896.1
41,176.5
33,826.7
7,349.9
1989
10,998.5
7,439.5
3,559.0
29,418.1
25,616.9
3,801.2
40,451.7
33,229.6
7,222.1
1990
10,012.5
6,607.0
3,405.5
27,289.2
23,648.5
3,640.7
37,032.8
30,233.3
6,799.5
1991
8,927.5
6,183.5
2,744.0
25,263.6
22,535.7
2,727.8
34,439.9
29,129.9
5,310.0
1992
10,211.5
7,994.5
2,217.0
29,195.6
26,692.2
2,503.4
40,393.9
35,384.4
5,009.5
1993
11,570.5
11,387.5
183.0
27,011.5
26,908.8
102.8
43,665.6
43,403.4
262.2
1994
11,262.0
11,147.0
115.0
26,736.1
26,670.9
65.2
43,023.3
42,856.8
166.5
1995
12,929.5
12,781.5
148.0
30,045.8
29,962.5
83.3
48,944.2
48,715.9
228.2
1996
13,505.5
13,505.5
0.0
31,675.0
31,675.0
0.0
51,133.9
51,133.9
0.0
1997
14,489.5
14,478.5
,11.0
33,583.6
33,580.9
2.8
53,687.5
53,680.1
7.4
1998
15,205.0
15,204.0
1.0
34,567.0
34,566.8
0.2
54,949.0
54,948.2
0.8
1999
17,718.5
17,718.5
0.0
38,627.7
38,627.7
0.0
62,310.6
62,310.6
0.0
2000
20,319.0
19,704.5
614.5
41,878.2
41,551.8
326.4
68,808.9
67,911.6
897.3
2001
22,760.5
21,595.5
1,165.0
45,483.7
44,853.0
630.7
74,687.3
72,957.5
1,729.8
2002
24,453.0
23,319.0
1,134.0
47,045.2
46,430.2
615.1
78,210.2
76,518.4
1,691.8
2003
27,021.5
25,970.0
1,051.5
54,517.1
53,935.8
581.2
88,769.2
87,196.3
1,572.8
Total
IT
DT
1,219.8
953.6
266.2
1,250.5
970.5
280.1
1,367.9
1,069.3
298.6
1,448.9
1,125.8
323.1
1,490.7
1,183.7
306.9
1,285.2
985.3
299.9
974.5
775.4
199.1
1,078.2
914.3
163.9
1,146.1
1,137.0
9.1
1,239.7
1,235.4
4.3
1,488.3
1,476.0
12.3
1,612.1
1,598.9
13.2
1,733.7
1,722.1
11.5
1,801.8
1,801.8
0.0
2,064.1
2,064.1
0.0
2,461.7
2,436.4
25.3
2,877.3
2,831.5
45.7
3,065.0
3,016.7
48.3
3,591.5
3,538.4
53.0
Total
IT
DT
2,164.3
2,043.3
121.0
2,203.0
2,074.9
128.1
2,442.5
2,307.2
135.3
2,623.0
2,476.4
146.6
2,626.0
2,485.6
140.4
2346.1
2,208.6
138.3
2,103.8
2,016.5
87.3
2,423.2
2,346.6
76.6
2,106.4
2,103.9
2.5
2,245.3
2,244.1
1.2
2,640.0
2,636.6
3.4
2,725.4
2,721.7
3.7
2,897.9
2,894.8
3.2
2,910.6
2,910.6
0.0
3,149.5
3,149.5
0.0
3,622.6
3,615.7
7.0
3,994.3
3,981.7
12.6
4,178.3
4,165.0
13.3
5,084.1
5,069.3
14.8
Total
IT
DT
Total
IT
DT
Total
IT
DT
67.5
67.6
64.6
223.9
212.5
11.4
22.7
21.6
1.1
70.0
70.2
67.7
224.2
212.2
12.0
22.2
21.1
1.1
73.2
73.3
70.8
246.9
234.2
12.6
22.1
21.0
1.1
73.1
73.3
70.1
263.2
249.5
13.8
23.3
22.0
1.3
72.9
73.1
70.0
263.7
250.5
13.2
23.6
22.3
1.3
68.6
68.4
70.8
236.2
223.1
13.1
21.2
19.9
1.3
61.0
60.7
68.3
227.2
218.9
8.4
31.4
30.5
0.8
61.1
61.4
54.8
246.6
239.0
7.6
28.5
27.8
0.7
57.4
57.4
36.8
214.7
214.4
0.3
25.1
25.1
0.0
63.9
63.9
30.4
224.8
224.7
0.1
22.7
22.7
0.0
66.6
66.6
43.9
264.4
264.1
0.3
26.8
26.8
0.0
66.0
66.0
64.7
268.7
268.4
0.3
23.5
23.5
0.0
66.8
66.8
67.8
285.4
285.1
0.3
24.6
24.6
0.0
66.3
66.3
0.0
288.3
288.3
0.0
26.3
26.3
0.0
65.8
65.8
0.0
311.6
311.6
0.0
28.2
28.2
0.0
70.4
70.5
41.9
360.9
360.2
0.6
34.8
34.8
0.0
70.8
71.0
39.6
388.3
387.2
1.2
28.9
28.8
0.0
71.3
71.4
44.7
407.6
406.3
1.2
31.5
31.5
0.0
72.7
72.8
48.7
498.1
496.7
1.4
40.5
40.5
0.0
Total
IT
DT
67.9
68.6
57.9
68.7
69.3
59.9
69.8
70.2
62.8
68.3
68.7
62.7
68.6
68.9
62.9
64.4
64.4
63.5
56.8
56.6
63.8
52.4
52.4
53.4
49.2
49.3
38.0
54.9
54.9
32.6
57.3
57.3
44.8
56.1
56.1
64.7
56.9
56.9
67.1
56.8
56.8
0.0
56.6
56.6
0.0
61.4
61.4
40.8
62.1
62.2
40.9
63.7
63.8
45.6
64.7
64.7
48.4
Note: IT – International transport
DT – Domestic transport
Performance indicators in air transport:
TKM – tonne kilometres
PSKM – passenger kilometres
U
87
CSA aircraft fleet – aggregate economic indicators
January – December 2003
Nonfinancial indicators – absolute
Number of registered aircraft
Average number of aircraft
Form of ownership – Owned
– Financial leases
– Operating leases
Average aircraft age
Kilometers flown – Scheduled flights
– Total
Net flying hours – Productive PL
SK
– Total
Block flight hours – Productive
– Total
Number of departures
Number of passengers
Utilized transferred TKM (thousands)
Available transferred TKM (thousands)
Utilized PSKM (thousands)
Available PSKM (thousands)
Aircraft fuel consumption (tonnes)
Nonfinancial indicators – indexed
Daily aircraft use – From net time
– From block time
– From block time – sk. m. r.
Average haul length (km)
Average haul length (hours) – From net time
– From block time
Average speed (km/h) – From net time
– From block time
Average aircraft payload (kg)
in which: goods, mail (kg)
i.e. in %
Average available payload (kg)
% utilization of total available capacity
% utilization of total available capacity – sk. m. r.
Average number of passengers
Average number of available seats
% utilization of seat capacity
% utilization of seat capacity – sk. m. r. *)
Average taxiing time (min)
Fuel consumption (kg) – Per net hour
– Per block hour
Fuel consumption (g) per available PSKM
*) B737 – B734 with increased seating capacity
A310
B737
B734
B735
AT72
AT42
3
2.57
1.69
0.31
0.57
12.21
9,312,742
9,332,996
11,884.77
11,542.39
11,587.94
12,345.81
12,400.86
1,833
256,439
167,493.9
250,495.4
1,623,373.3
1,925,434.3
59,021
3
3.00
8
7.76
12
11.27
4
4.00
4.00
3.00
11.03
3,069,250
5,067,840
5,463.21
7,602.14
7,622.86
8,782.65
8,808.27
4,106
430,092
52,463.8
74,916.2
563,200.0
788,677.1
21,127
5.00
2.76
6.05
15,041,122
15,130,695
24,571.48
22,922.70
22,951.23
26,968.36
27,011.77
12,810
1,139,521
137,649.1
213,848.2
1,416,569.7
2,025,949.2
64,300
10.00
1.27
9.25
17,501,097
17,814,327
26,523.25
27,472.65
27,552.04
32,685.55
32,789.54
18,378
1,164,859
113,906.3
186,825.6
1,194,195.6
1,754,923.2
71,482
11.79
3,307,672
3,394,231
9,008.83
8,731.76
8,829.88
10,193.48
10,304.08
7,543
254,934
11,157.7
18,779.5
119,363.6
207,087.5
6,059
5
5.00
1.00
2.00
2.00
9.04
3,466,934
3,773,876
11,120.39
10,492.96
10,532.17
12,447.77
12,497.45
10,086
239,524
8,507.2
14,359.2
90,905.0
168,153.7
6,192
12.35
13.22
12.68
5,092
6.32
6.77
805
753
17,946
2,292
12.77
26,840
66,9
67,6
174
206
84.3
85.3
27
5,093
4,759
30.7
6.96
8.04
7.92
1,234
1.86
2.15
665
575
10,352
350
3.38
14,783
70.0
69.7
111
156
71.4
72.1
17
2,772
2,399
26.8
8.10
9.53
9.12
1,181
1.79
2.11
659
560
9,097
671
7.38
14,133
64.4
63.0
94
134
69.9
68.2
19
2,802
2,380
31.7
6.70
7.97
7.59
969
1.50
1.78
647
543
6,394
361
5.64
10,487
61.0
58.4
67
99
68.0
65.5
17
2,594
2,180
40.7
6.05
7.06
7.40
450
1.17
1.37
384
329
3,287
122
3.72
5,533
59.4
61.2
35
61
57.6
59.2
12
686
588
29.3
5.77
6.85
6.75
374
1.04
1.24
358
302
2,254
86
3.83
3,805
59.2
57.0
24
45
54.1
52.7
12
588
495
36.8
Lease
3,098
3,098
0.00
4.55
4.55
5.03
5.03
2
294
42.0
49.5
455.4
520.5
13
1,549
2.28
2.52
681
616
13,573
343
2.52
15,969
85.0
147
168
87.5
14
2,945
2,664
25.7
BSA
Total
0
35
33.61
6.69
17.31
9.61
9.19
51,701,915
54,517,063
88,571.92
88,769.15
89,080.67
103,428.65
103,817.00
54,758
3,591,465
498,056.3
770,306.9
5,084,061.6
6,993,380.8
228,195
105,802
6,836.4
11,033.3
75,999.0
122,635.4
62.0
56.1
16
26
62.0
56.1
7.26
8.46
8.12
996
1.63
1.90
612
525
9,136
1,406
15.39
14,130
64.7
63.7
86
118
72.7
71.3
16
2,562
2,198
32.6
This document is not Annual Report as defined by Act No 563/1991, on accounting.
Consulting, design and production:
© B.I.G. Prague, Hill & Knowlton Associate, 2004
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