* Czech Airlines still sees FY break-even
* CEO says no earnings visibility yet for 2009
* Says firm well positioned for global downturn
* To create cash reserve of 2 bln crowns
* 9-month pretax profit up 124 percent
(Adds 9-month results)
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 add 300 million crowns
($15.35 million) to the firm's fuel bill in 2008 compared with
last year, which it has offset through 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.
He said the airline's full-year target is unchanged "at the
moment", though it would be "very ambitious" to make forecasts
for 2009 given the volatile state of the market.
In the past three years, CSA has slashed costs and sold
non-core activities such as cargo and catering, after earlier
overly-ambitious investments in fleet expansion.
The group posted on Wednesday a 124 percent year-on-year
jump in pretax profit to $22.05 million in the first nine
months, according to international accounting standards (IFRS).
Revenue climbed to $1.12 billion from $876.8 million, CSA
said, while passenger traffic increased 4.9 percent to 4.4
million in that time.
Lasak said the firm was in a better position to withstand
the global slowdown than some of its rivals.
Industry body IATA has estimated airlines are 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.
"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," Lasak said.
"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.
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 state-owned Prague Airport.
The swap, agreed in October, will help the firm create a
cash reserve to cushion the impact of the credit crisis.
Some foreign banks affected by the crisis have cut credit
limits, Lasak said, but other credit 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,
which also includes Air France-KLM <AIRF.PA>, Alitalia
<AZPIa.MI>, Delta Air Lines <DAL.N>, Korean Air <003490.KS>.
Lasak said CSA could become a takeover target for either a
strategic or a 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.
