Czech Airlines starts breathing again thanks to the cooperation with Korean Air

Czech Airlines inaugurated on 11 December two new services from Prague and Košice to Bratislava. Both services, which are operated with six weekly flights utilising the airline’s 48-seat ATR 42s, will see frequency increase to 10 weekly flights at the start of the summer season.

Czech Airlines, one of the oldest airlines in Europe, celebrated its 90th anniversary on 5 June. According to its official website, the carrier has transported more than 100 million passengers since it started operations. The flag carrier of Czech Republic, which was on the point of collapse, has been recently undergoing a restructuring campaign. In March 2013, Korean Air acquired a 44% stake in the carrier, providing a lifeline for the loss-making airline, while increasing the Asian carrier’s presence in the European market. As part of the restructuring campaign, the SkyTeam member is currently undertaking a transition to a fleet of just two aircraft families, namely Airbus and ATR, as its B737-500s will be retired at the end of the winter season. Czech Airlines’ main hub is located at Prague Airport, where the carrier is the dominant player operating on 37 routes and commanding over 30% of weekly flights and seats.

Traffic declines by 34%

The airline handled just 2.8 million passengers last year, a decrease of 34% over 2011 figures. This is mainly due to the carrier not being able to recover after the economic downturn and struggling to turn a profit, resulting in it reducing its flights by 31% and seat offering by 35%. However, the carrier is looking forward to reviving after the recent partnership with Korean Air, which led to the inauguration of several services in 2013, including the most popular new additions to airline’s network — the services from Prague and Košice to Bratislava.

Czech Airlines' Traffic 2004-2012 Annual Passengers (millions) and Load Factors

Source: Flightglobal 2004-2012

Overall, looking at passenger data between 2004 and 2012, the airline’s traffic decreased by 35%, while the seat capacity and frequencies were cut by 40% and 36% respectively. As a result of capacity reduction, Czech Airlines increased its load factor by 1% last year when compared to 2011, however this is still 9% lower than the 79% average of AEA members.

Prague-Moscow is #1 route by seats and flights

In terms of the airline’s most significant routes, the routes to Moscow Sheremetyevo and Paris CDG are the most frequently served, representing a combined frequency share of nearly 17%. The Prague-Sheremetyevo service still accounts for the majority of weekly seats (4,484) and flights (29), which increased by 13% and 7% respectively when compared to the same week in 2012. Due to Russia still being a regulated country market, the 1,675-kilometre sector is contested by just one carrier, Aeroflot (four times daily), which would seem a reasonable recipe for Czech Airlines’ long-term survival.

Czech Airlines' top 12 routes Share of weekly flights and seats

Source: Innovata / Diio Mi for w/c 17 December

Despite reducing its seat capacity by 4%, seven out of Czech Airlines’ top 12 routes experienced capacity growth, when comparing data from this December with the same week last year. The stand out performances are those emanating from services to Düsseldorf (32%), Moscow Sheremetyevo (13%) and St Petersburg (19%), the latter becoming a new entrant onto this year’s table. On the other hand, services to Bucharest have provided the greatest capacity decrease (-21%), as a result of Czech Airlines reducing its weekly flights by 36%.

Back in the long-haul market

A total of seven routes were launched by the SkyTeam member in the course of this year. Prague, the carrier’s main base, saw a total of six route additions, of which only two are genuine, the thrice-weekly flights to Perm and the twice-weekly to Seoul. The notable long-haul service to Seoul was launched on 1 June, as a result of the recent cooperation with Korean Air. Czech Airlines, which dropped its long-haul routes in October 2009, returned to this market utilising a leased A330-300. With the inaugural of the thrice-weekly services to Perm on 31 March, the carrier now serves a total of seven destination in Russia, which is the fastest growing country market as well, mainly due to the traffic feed between Czech Airlines and fellow SkyTeam partner Aeroflot.

Origin Destination WF Competition (WF)
Prague (PRG) Nice (NCE) 4
Perm (PEE) 3 Tatarstan Airlines (1)
Zurich (ZRH) 10 SWISS (28)
Munich (MUC) 18 Lufthansa (28)
Seoul Incheon (ICN) 2 Korean Air (4)
Bratislava (BTS) 6
Košice (KSC) Bratislava (BTS)
Source: anna.aero New Route Database

Comments

  1. stop says:

    breathing stopped suddently from December on PRG-MSQ route… what a shame!

  2. Farouk Mogheth says:

    Lets hope and see that the cooperation goes well. Im a cautious optimist, however the latest activity by Korean proves that it’s interested.

    - Korean Air last week announced that it would use its contractual right and bought another 34% of CSA Czech Airlines (44 +34). However for Czech AIrlines to retain its status as an European carrier, foreign ownership of a non-EU shareholders cannot exceed 49%. Thus Korean sells these 34% shares directly to Travel Servis making Czech Airlines almost a private airline. I consider it a mini-merger of sorts. Travel Service will be incorporated into the KE/OK strategy adding 40 interesting destiations.

    - from March, Czech Airlines increases its frequencies to Seoul ICN to 4x weekly. So PRG-ICN will have 8x weekly with expectation of increasing capacity by 4Q 2014 further.

    - Czech Airlines cancelled its cooperation with Etihad Airways and will stop Flying to AUH (4x weekly) concentrating on Korean.

    - Czech Airlines openly announced with no specification of time that its working on one or two Long haul destinations, where one of them is definitely Japan (NRT? HND?) and the second to be as well in Asia. All awaiting completion of permits etc…

    - Some destinations got cancelled, however Czech airlines is going through a period of stabilization and seeing “what works” and what “doesnt”

    • Dear Farouk Mogheth,

      Thank you for the information provided. The further 34% acquisition of Korean Air is really interesting, taking into account the current EU laws. We are looking forward to seeing what will happen in the next months considering the current restructuring programme of the carrier.

      Regards,
      Vlad Cristescu

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