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Czech Republic Freight Transport Report Q2 2009
Market |
Logistics |
Report Type |
Market Research |
Country |
Czech Republic |
Published |
13 May 2009 |
Number of Pages |
54 |
Download |
|
Immediate |
|
Publisher |
Business Monitor International |
In late March the Czech finance ministry said the first round of tendering in the bidding for the privatisation of CSA Czech Airlines had concluded with a total of four preliminary bids being made. The four bids were from Air France-KLM, Russia’s Aeroflot, Odien (a private equity group) and a consortium including Czech companies Unimex Group and Travel Service. The ministry said that a winner would be selected by the end of September 2009. The government is selling its 91.5% stake in the airline, at a time when the global recession is creating downward pressure on its valuation and on profitability. Independent analysts had scaled down their estimate for the value of the shares on sale to CZK5bn (US$255mn). According to a report in French newspaper La Tribune Air France/KLM was prepared to pay up to EUR200mn (US$260mn). Bidders were required to agree to retain CSA’s status as the national Czech flag carrier that among other things would retain the airline’s rights under a series of bilateral government-to-government air travel agreements. Doing so would require the successful bidder to form partnerships with Czech or European companies. Aeroflot, which has been looking for a European partnership for some time, said it had not yet decided on its preferred partner, but would be looking for a 49% stake in any consortium together with the right to appoint the airline’s CEO. Air France noted that CSA’s flight network was ‘highly complementary’ with its own, and would give it a better presence in central and Eastern Europe, where its German competitor Lufthansa, has a stronger network.
In 2008 CSA reported pre-tax profits of US$550,000, coming after three years of losses. The return to profitability was helped by a restructuring programme including the divestment of non-core assets and the sale and leaseback of a number of planes.
It is believed the Czech aviation sector will contract in 2009 because of the recession. In our latest Czech Republic Freight Transport report, it is concluded that air cargo traffic will grow by an average of 3.6% per annum on average over the next five years. This is based on a number of factors. Despite tough conditions, the Czech Republic is set for positive economic growth (2.0% per annum on average to 2013, according to our forecasts). European Union (EU) membership has placed the country near the centre of gravity of Eastern European logistics.
We expect freight carried by road to be positive over the next few years, with annual growth averaging 2.7% in 2009-2013. This incorporates the negative effect of the fall in demand currently taking place. Oil shipped by pipeline should grow at around 2.3% a year, ahead of GDP. However, we expect rail freight growth to lag, as investment in the rail system takes time to have an effect, meaning that the average growth for 2009-2013 will come out at a more modest 1.7% per annum. Freight carried by inland waterways will grow slowly, at 1.0% per annum. Consequently, we now forecast total freight carried across all modes, measured in million tonne kilometres (mntkm), to rise by an annual average of 2.4% per annum in 2009-2013. Under our freight transport rating, the Czech Republic earns a composite score of 59.4 out of a theoretical maximum of 100. This places it at the upper end of its European peer group. The total value of transport and communications GDP will rise to US$29.9bn in nominal terms by 2013, representing 11.6% of the Czech Republic’s GDP. The transport and communications sector employed 373,000 people, or 7.8% of the labour force, in 2008. We see that figure holding broadly steady in the five years to 2013.
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