A commentator in the Czech business daily Hospodarske Noviny has recently brought up an interesting point, which has been widely discussed ‘privately’ in industry-related circles, but not in public.
As some may know, the Czech Republic’s biggest producer of military goods, Aero Vodochody, has been submerged in problems for a long time. Boeing privatized part of it, but left recently amid terrible economic results and sold its shares back to the Czech Government. Taxpayers have already had to pay around 11 billion crowns (around 440 million USD) to save the company.
The light combat aircraft L159, which is the company’s production backbone, is not really selling well on the world market and essentially the only customer is the Czech military. Aero is also manufacturing Sikorsky helicopters for the U.S. corporation, but the output is somehow small (21 units in 2003, about 25 in 2004) and earnings meager, to put it nicely. Nevertheless, this makes some +40% of the company’s total income, which today is about 3.8 billion crowns (around 150 million USD).
And now to that point brought up in the newspaper. It is believed that the companies that will be bidding for Aero in the new privatization process, which is supposed to start any time now, have hardly any interest in developing new aircraft or making choppers. Aero is about to finish a new airport in Vodochody (21 km. north of Prague), which is perceived as extremely lucrative. It would be the perfect place for low cost airlines to land, very close to the center and practically on the D8 highway to Dresden in Germany.
It is impossible to say what will happen during the privatization, but experts warn that Sikorsky has an extremely beneficial contract signed with Aero, so if a new owner comes they can stop the manufacturing of their helicopters in the Czech Republic immediately and leave, firing all their workers. Something similar is likely to happen with the Ae270 small passenger aircraft that is nearing certification and is being manufatured in cooperation with A.I.D.C., a Taiwanese company.
So, what are your thoughts? Can Prague sustain another airport, albeit small? The company is not hiding its intentions even now, so it seems I might find EasyJet and Ryanair landing a few kilometers away from my house in no time...