The Government of the Czech Republic yesterday approved the plan for restructuring Czech Airlines, which comprehensively addresses the functioning of the company in the next 3 years. The main concept is to emphasise the core business and change the transportation network model. The CSA restructuring plan represents an extensive set of measures that are to be gradually implemented up to 2012. It confirms the direction taken towards establishing a holding arrangement of the company. The parent company CSA will increasingly focus primarily on its main line of business – scheduled air carriage. Through subsidiaries, it will operate and offer services in other areas. In addition to its existing subsidiaries, CSA is considering hiving off certain other sections, those which demonstrate the potential of being able to function on their own commercially. A confirmed plan is the separation of charter carriage, and under consideration are the hiving off of technical maintenance and, for example, the CSA Training Centre. The number of unprofitable routes will be reduced; this effect will first be evident in the 2010/2011 flight schedule. In addition, fleet will be appropriately adapted to the new number of destinations offered, with its structure being simplified and made more efficient. Like the offer of destinations, the fleet may also be reduced by up to 30% by 2012. The Airline will use a single type of narrow-fuselage aircraft - Airbuses, all Boeing aircraft will be gradually sold off by the end of 2012. A number of revenue management initiatives are proposed in the restructuring plan, both in passenger carriage and ancillary activities. These include an improvement of the pricing system and so-called revenue management methods, so as to take full advantage of the potential of the O&D system (an Origin & Destination dynamic pricing system) introduced in the last quarter of 2009. Cost cuts will attend all changes in the company. They will involve a reduction in operating costs, the costs of support activities, and costs related to leasing, information technologies, telecommunication, and a number of the company’s employees. CSA targeting decrease loss from 4 700 millions CZK last year to 600 millions in 2010.
