Czech Airlines and Prague Airport stated the establishment of a new holding company for the two does not threaten competition or create conflicts of interest (Dow Jones, 25-Nov-2010). Czech Airlines Supervisory Board Chairman Michal Mejstrik stated the holding company will not result in a merger of the carrier and the airport, only consolidation at the ownership level. The Czech Government will provide no financial support in the arrangement. Prague Airport General Director Miroslav Dvorak added “there will not be any forbidden transfer” of sensitive business information between the two. Prague Airport is expected to financially support Czech Airlines by directing its dividends into the carrier. Mr Dvorak stated the holding company aims to stablise the carrier by 2012 and eventually privatise some or all companies and subsidiaries.
Prague Airport to support the stabilisation of Czech Airlines
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CAPA global airline financial outlook
Operating margin to reach new high in 2016, but this may signal a subsequent downturn. CAPA’s global airline operating margin model indicates that the industry was more profitable in 2015 than it has been for almost five decades. Moreover, the model predicts that world airline operating margins will rise further above previous historic peak levels in 2016. These new levels of profitability are mainly thanks to the low oil price environment, coupled with strong demand growth in spite of global economic growth rates that are far from exceptional.
Much of the industry is also benefiting from a period of relative capacity discipline. New revenue sources may also be helping, although their role in airline profitability is still emerging.
The macroeconomic and geopolitical backdrops provide the main risks to this forecast. Beyond that, the biggest challenge for the industry will then be to try to sustain margin levels, rather than to allow a peak to be followed by a rapid downturn, as has always happened in the past. But downturns can play a positive role in industry development, possibly even stimulating consolidation.
Global airline financial outlook
Operating margin to reach new high in 2016, but this may signal a subsequent downturn