Business News

In Business News this week: the government prepares to intervene as the national air carrier CSA continues to lose money; the car maker Skoda announces a record jump in profits - and a healthy rise in sales; the financial police's biggest ever operation ends with 100 arrested for cigarette counterfeiting; CD and DVD prices are cut as manufacturers struggle to compete with home copying; and could a new road tolls system lead to inflation?

Ministries step in as CSA keeps losing money

Ruzyne airport

As the Czech national carrier Czech Airlines continues to lose money, the government is planning to step in, Mlada fronta Dnes reported this week. Finance Minister Vlastimil Tlusty said he found the situation at CSA "alarming", suggesting that it could be time for a change of management. His ministry and the Transport Ministry are set to launch a tender for a consulting company to propose a restructuring of the airline. Since turning a profit in 2004, CSA has been losing money - this year it expects to make a loss of 600m CZK (over 27m USD). Czech Airlines recently asked the state for a capital injection of 2 billion CZK, to help erase its losses.

Record profits for Skoda Auto...

The car maker Skoda Auto made after-tax profits of over 8 billion crowns in the first three-quarters of this year, up a record 60 percent on the same period in 2005. The rise has been attributed to a streamlining of processes and cutting material costs.

...who also report a healthy sales rise

Skoda Auto has also reported a considerable increase in sales. In the first three quarters of this year it sold 11.1 percent more vehicles than in the same period last year. The Czech Republic's biggest exporter reported very strong growth in Russia, Romania and the Baltic states.

Biggest financial police operation ever breaks up cigarette counterfeiting group

Around 100 people were arrested on charges of producing counterfeit cigarettes on Thursday, in what is being called the biggest operation in the history of the Czech financial police force. The police and customs officials said they had prevented tax evasion estimated at around 400 m CZK (18 m USD). Hundreds of tonnes of tobacco, millions of cigarettes and a complete facility for the production of cigarettes were seized in the operation.

Labels cut CD, DVD prices in effort to combat illegal copying

In an effort to combat illegal music downloads and home CD burning Czech music companies are reducing their prices in the pre-Christmas period, Hospordarske noviny reported this week. The retail price of imported CDs has been around 500 CZK (almost 23 USD) but that has been reduced to 359 CZK for selected titles, the head of EMI in the Czech Republic said. Other major labels are also selling CDs by foreign artists for between 350 and 380 CZK, while Czech CDs start at around 250. DVD prices have also been reduced, with new titles starting at around 500 CZK.

Road toll could lead to inflation as haulage prices increase

Road haulage prices in the Czech Republic could increase by 15 to 20 percent in 2007 due to the introduction of an electronic tolling system, the Czech Press Agency reported. Economist David Marek said the motorway tolls would lead to consumer price rises and were one of the inflation risks for next year.