Korean Air is reportedly considering a bid for a 44% stake in Czech Airlines to strengthen its presence in Europe, according to local reports from The Korea Herald, Yonhap and Maeil Business Newspaper. The carrier reportedly plans to reach a final decision after completing due diligence on the carrier later this month. This marks the first attempt of a South Korean carrier to seek a stake in a foreign airline. The carrier operates to 12 destinations in Europe at present.
Korean Air considers bid for stake in Czech Airilnes: reports
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CSA Czech Airlines: restructuring, partnerships, and now growth for SkyTeam's smallest airline
One of the five oldest airlines in the world that are still in operation, CSA Czech Airlines is also the smallest airline in SkyTeam by passenger numbers. After several years of losses the airline returned to profit in 2015 and expects another positive result in 2016, albeit below last year's level. CSA Czech Airlines is growing once more this year, after a restructuring programme involving reductions in its fleet, capacity and headcount it has also developed a profitable contract flying business. Together with lower fuel prices, its restructuring has helped to achieve the airline's turnaround.
CSA Czech Airlines has a predominantly European network. Its only intercontinental route is from Prague to Seoul, the hub of its part-owner – codeshare partner and fellow SkyTeam member, Korean Air. Its biggest destination market is Russia, but this is followed by the Western European countries France, Italy and Germany. It has a relatively low share of seats at its hub in Prague, where LCCs have a significant share and Ryanair has opened a base this winter. However, although CSA faces strong competitors on routes to non-SkyTeam hubs, competition is limited elsewhere by its targeting of niche regional routes and its use of codeshare agreements (including with Travel Service, another part owner).
Hainan Airlines to Las Vegas: more international flights to follow as Southwest starts partnerships
Hainan Airlines' Beijing-Las Vegas 787 service commencing in Dec-2016 will end Korean Air's tenure as the only Asian airline in Las Vegas. Las Vegas is arguably the largest feasible unserved North American market for Hainan. Delivery of over 30 787-9s in coming years means that Hainan will need to establish new markets. The route tests the booking data that airlines and airports rely on: Las Vegas believes airlines have shied away from serving the city and that this is misguided – because Las Vegas' international visitors are not represented, since they often take multi-city itineraries and thus do not appear as a Las Vegas international passenger. Las Vegas wants to prise its international passengers away from transit hubs.
Hainan's presence will initially be about half of Korean Air's, which was upped days prior to Hainan's announcement. Yet this may be the best outcome for Korean. A Chinese service was inevitable, but Las Vegas had to wait for political sensitivities to cool since Las Vegas flights would not have been timely as China's anti-corruption and austerity campaigns unfolded. Hainan brings enough presence to deter more competition in the short term, yet its narrow focus on the outbound Beijing market leaves Korean Air with many opportunities around Asia. Further international growth for Las Vegas is likely after McCarran airport's largest operator, Southwest Airlines, is ready to partner with other airlines in 2018.