* Czech Airlines confirms full-year break-even target
* CEO says firm well positioned for global downturn
* To create cash reserve of 2 bln crowns
By Jan Korselt
PRAGUE, Nov 12 (Reuters) - Czech Airlines (CSA), slated for
privatisation next year, has not seen the drop in demand that
has hurt some of its peers and is on track to meet its full-year
break-even target, Chief Executive Radomir Lasak said.
Lasak told Reuters in an interview cleared for publication
on Wednesday that high oil prices would raise fuel costs by 300
million crowns ($15.35 million) in the full year 2008, compared
with the last year, which the firm has countered with cost cuts.
"This year, we have not felt (the economic crisis) in any
dramatic way, when I see how tickets have been booked until the
end of the year," Lasak said. "There is no change in our (full
year) prediction at this moment."
In the past three years, CSA slashed costs and sold non-core
activities such as cargo and catering to ward off potential
trouble, after earlier overly-ambitious investments into fleet
expansion.
In the first half of 2008, the firm posted a pre-tax profit
of $209,000, compared to a loss of $37 million a year ago, and
revenue rose 34 percent year-on-year to $700 million.
It is due to post nine-month financial figures later on
Wednesday, after reporting a 4.9 percent increase in passenger
traffic for the period to 4.4 million.
Lasak said the firm was in a better position than some
others to withstand the global slowdown in the airline business.
"Of course, a further outlook (beyond this year) is a big
question mark. Volatility is huge in all markets, it would be
very ambitious to predict anything at this moment."
"We do not have to implement any radical steps that you can
see other airlines are doing -- that they have grounded
airplanes, and cut workforce."
"This is not a sale in need," Lasak said, referring to the
planned privatisation.
Lasak's upbeat comments were in contrast to indebted peer
Austrian Airlines, which called for quick decision on its sale
last week, warning that any dramatic development in the industry
could endanger the process.
Industry body IATA had said airlines were set to post losses
of $5.2 billion this year, as stagnating demand for air traffic
hurts ailing airlines already hit by high oil prices.
CASH RESERVE
Lasak said the full-year target of "slightly positive break
even" excluded a one-off gain worth hundreds of millions of
crowns from a real estate swap with the state-owned Prague
Airport.
The swap, agreed in October, will help the firm create a
cash pillow to cope with the credit crisis.
Some foreign banks affected by the crisis have cut credit
limits, Lasak said, but other lines remain in place.
"In the course of one or two years we would like to create a
liquidity reserve in the order of 2 billion crowns ($99.60
million)," he said.
The Czech government has confirmed plans to complete the
sale of a 91.5 percent stake in CSA in the first half of 2009.
Lasak did not comment on the sale price, which some analysts
see around 4 billion crowns, nor potential bidders.
The only company that has shown interest so far is Russia's
Aeroflot <AFLT.MM> , CSA's fellow member of the SkyTeam alliance
along with Air France-KLM <AIRF.PA>, Alitalia <AZPIa.MI>, Delta
Air Lines <DAL.N>, Korean Air <003490.KS> and others.
Lasak said CSA could become a takeover target for both a
strategic or financial investor, though greater interest could
be expected from companies based in the former Soviet Union or
Asia, which could use Prague as a hub to western Europe.
