Ruzyně lures Asian flights

Despite speculation about the conflicting interests in the merger of Prague Airport and Czech Airlines (ČSA), the airport is looking to wean itself from dependency on the unprofitable state airline and strike out on its own with an ambitious plan to double business in the next five years by bringing in more foreign airlines to use Prague as a transfer point for long-haul flights.

The merger of Prague Airport and ČSA under Český Aeroholding raised eyebrows in the industry earlier this year, particularly because what's best for an airport - high passenger turnover made possible by hosting many different airlines - is not what's best for a commercial airline that would prefer a smaller pool of competition, especially at its home base.

As ČSA continues restructuring in anticipation of a privatization in 2012, Prague Airport is working to significantly boost passenger levels from the current figure of around 11 million per year to 20 million by 2020. To accomplish this, the airport wants to double the number of long-haul flights coming through Prague and build a third runway, expected to be completed in 2016.

The number of travelers passing through the airport has dropped since 2010, when the restructuring of the unprofitable state airline ČSA began, a process that has involved cutting the airline's routes, fleet and employees.

"We knew about the restructuring, and so we are looking at ways to replace passenger levels from the cuts in routes, and this means we are actually managing to replace the capacity that was left open by ČSA with some other airlines," said Michaela Lagronová, an airport spokeswoman.

ČSA has about a 39 percent of passenger share at the airport, Lagronová said, compared with 50 percent before the ČSA overhaul, which is not expected to further decrease in the near future, she said. Since the restructuring started, the airport's share of passengers transferring fell from 24 percent to 19 percent, according to Bloomberg News.

Negotiations are now underway with a number of commercial airlines, mostly based in Asia, to make Prague their destination for transferring passengers.

"We see big potential, mainly because in Asia, the market is really growing. From the data we have, we can see that there has been an increase of about 23 percent in passengers traveling to Asia in the first six months of this year compared with last year," Lagronová said.

Results from negotiations take time, though, she said, perhaps years, as the airport has to provide data about the market potential and incentives, after which the airline must determine whether the arrangement is profitable.

"It takes longer than just one, two or three meetings," she said.

To help motivate the boost in long-haul traffic, the airport is offering more incentives for the next period from April 2012 through March 2013.

"Fees at Prague Airport will not change, but we are going to increase the incentives policy to attract more of these airlines to come," Lagronová said.

In the meantime, passenger levels at the airport are expected to grow 3 percent to 4 percent year on year, and are already seeing a 5 percent increase in the first seven months of 2011, Lagronová said. Levels for the first quarter, though, were lower by 3.62 percent compared with the same period last year, according to a report from Airports Council International. Lagronová said net profits were expected to be around the same as in 2010, around 1 billion Kč.

Airlines that already use Prague as a transfer destination for long-haul flights have been increasing their seat capacity this year, Lagronová said. Korean Air increased capacity around 7 percent in the first months of this year compared with the same time last year, and Delta has increased capacity about 12 percent. Emirates has only been flying through Prague since last July, but is expected to increase capacity 25 percent in the winter schedule.

"Everyone is increasing their capacity, which is good news for us and shows maybe the aviation business is not in a crisis anymore," Lagronová said. "Given the economic circumstances in Europe, maybe it will get more difficult, but for the moment, it looks good."

Cat Contiguglia can be reached at
ccontiguglia@praguepost.com