Czech Airlines sets course to lease large part of future fleet
Czech Airlines has sealed a deal which means a large part of its future fleet will be leased and not owned. The financial burden of honouring an eight-year-old agreement to buy aircraft was untenable for the recovering, but still fragile, carrier.
Czech Airlines faced the fundamental problem that it agreed in 2008 to acquire seven A320 aircraft, a move which was later confirmed by management although they had a chance to back out. The carrier was then still riding high and in expansion mode before the crash – the financial and economic crash of that year.
A much slimmed down carrier now with curtailed ambitions faced the basic problem that in spite of declaring a small, 223 million crown, operational profit last year it could in no way afford to buy the new planes outright. The bill would probably come to around 19 billion crowns.
The new deal is therefore described as the best compromise possible. Czech Airlines will buy one aircraft, the latest version of the A320, the A320neo, and the remaining six of the same would be taken under an operational lease. That means that the aircraft are basically rented by the airline without ownership, unlike financial leases where the assets are eventually transferred.
The A320neo, neo standing for new engine option, will replace the ageing and slightly smaller A319s. Czech Airlines operates nine A319s. Both plane models are targeted at short to medium range routes and capable of carrying around 165-180 passengers if a business class is included. The A319 is probably a better fit for Czech Airlines current routes and ambitions.
The new aircraft would be phased into operation from 2019 onwards. Airbus has just started deliveries of the plane worldwide, which is slightly more expensive than the current A320 but has lower operating costs, with a fairly full book of orders for the forthcoming years. That means that some flexibility on the delivery schedule could probably be found.
Over recent years Czech Airlines has rationalised and slimmed down its fleet. Almost all its ling-haul aircraft, apart from one Airbus A330 are now gone. At the other end of the fleet, the small ATR 42 fleet has been halved and is now down to six planes. All the Boeing aircraft, there were 18 mid-range Boeing 737’s in operation in 2009, have now disappeared from the fleet as well.
The carrier’s marketing strategy has evolved as well. The former concentration on mid-range connections with Russia and some of the states of the former Soviet Union has been reversed in part, most new links are focused on the Balkans or Western Europe.
