Huge passenger falloff means major losses for Czech Railways

Illustrative photo: Jiricek72/Pixabay, CC0

Czech Railways says its losses this year could reach up to CZK 5 billion. The estimated losses have been deepened by the second wave of the coronavirus pandemic in the second half of the year, when, like other operators, Czech Railways cancelled dozens of routes and saw a major fall-off in passenger numbers.

Other carriers have also reported losses in the hundreds of millions or billions of crowns.

Czech Railways spokesperson Radek Joklík told the Czech News Agency that the most significant losses stemmed from fares, after passenger demand fell to about one-tenth of the usual level during the first period of Covid-19 restrictions and as low as one-quarter the usual level in the second.

At the start of the autumn Czech Railways estimated it would lose around CZK 3 billion in 2020.

The state company said it had managed to make savings in other areas but that this was far from enough to make up for the shortfall caused by almost empty trains.

Czech Railways also looks set to make layoffs, said the Czech News Agency. CEO Ivan Bednárik told the newspaper Hospodářské noviny that if he did simple cross-multiplication and looked at revenues and costs in 2012 he would have to let over 1,000 workers go.

However, it is not that simple, said Mr. Bednárik said.

Hospodářské noviny has also reported that some of Czech Railways key daughter companies were also likely to make a loss in 2020. The entire group employs 23,500 people.

This year’s losses will not be reduced much by planned state support either. The Ministry of Transport wants to distribute CZK 400 million among carriers for routes that it orders from them.

In addition, the state wants to forgive commercial rail operators for two-thirds of this year’s railway charges. In the case of Czech Railways, this would mean a discount of around CZK 80–90 million.