CZECHOSLOVAKIA'S INTERNATIONAL CIVIL AIRLINE

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T01098A000100040001-1
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 40
• Document Creation Date: November 16, 2016
• Document Release Date: February 7, 2000
• Sequence Number: 1
• Publication Date: April 1, 1973
• Content Type: REPORT

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CENTRAL INTELLIGENCE AGENCY
Office of Economic Research
Czechoslovakia's International Civil Airline
Classified by 015319
Exempt from general ER RP 73-4
declassification schedule of E.O. 11652
exemption category 56(1),(2),(3) April 1973
Automatically declassified on
Date Impossible to Determine
Cony No.
49
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CZECHOSLOVAKIA'S INTERNATIONAL CIVIL AIRLINE
Summary
Czechoslovakia's national airline (CSA) has an
international route network second only to Aeroflot's
among.Communist airlines. Its operations extend
over an expansive but thinly served network, outside
the Warsaw Pact countries, of more than 41,000 miles.
Services are heavily concentrated in Europe, with
other routes stretching from North America and the
Caribbean to Indonesia and from the Scandinavian
countries to Africa. The current international
schedule includes more than 75 flights per week,
about three-fourths of them to 33 non-Communist
countries, Cuba, and Yugoslavia, and the remainder
within the Warsaw Pact. Although the largest air-
line in Eastern Europe, CSA ranks behind many small
international Western carriers in frequency of
flights and number of passengers carried.
After a decade of rapid growth, which saw CSA's
European route network extended to the Middle East,
Africa, and South Asia, the Czech airline by 1968
was faced with a number of interrelated problems.
Note: Comments and queries regarding this pub-
lication are welcomed. They may be directed to
of the Office of Economic.Re-
search, Code 143, Extension 7884.
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Among these were management deficiences, low-yield
routes, aircraft inventory limitations, and slow-
down in the growth of international passenger traffic.
Czech aviation officials responded by acquiring
modern jet aircraft from the Soviet Union, adding
routes with greater traffic potential, shedding
unprofitable routes, and streamlining management.
The most important service added was CSA's Prague
New York flights inaugurated in may 1970, which
enhanced the airline's prestige and placed it in
the lucrative North Atlantic market.
The reorganization and consolidation of CSA's
operations have continued through 1972 and into
early 1973. A stronger, more profitable route net-
work has been established, and the Soviet jet short-
to-medium-range TU-134As and jet long-range IL-62s
have been integrated into the fleet. Flights to
Mexico City, Rio de Janiero, Buenos Aires, Sydney,
and Hanoi may be added as extensions of existing
services.
CSA has been studying additions to its fleet
inventory and has an immediate need for a half
dozen medium- and long-range aircraft. Despite
Czech dissatisfaction with the overall performance
of their Soviet aircraft, three more IL-62s and
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five new TU-154s of medium to longer range are
scheduled for delivery later in 1973 and 1974.
Earlier considerations of US aircraft were negated
by Soviet arm twisting, and the Czechs almost cer-
tainly will continue to operate an all-Soviet-built
civil air fleet.
Discussion
Origin, Growth, and Problems
1. Czechoslovakia's national airline was formed
in 1945 from Czechoslovak National Airline and
Ceskoslovenska Letecka Spolecnost, both in exist-
ence since the mid-1920s. Durin7 the 1950s, the
new airline underwent several reorganizations and
by the end of the decade was under the control of
the State Aviation Administration of the Ministry
of Transportation, which still oversees its oper-
ation. Czechoslovakia was one of the original
organizers of the International Civil Aviation
Organization (ICAO), an organization formed soon
after World War II to foster the orderly growth of
international aviation. In addition, CSA is a
member of the International Air Transport Associ-
ation (IATA), an organization of scheduled inter-
national airlines concerned primarily with rate
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questions. The Czech national airline supplies
both domestic and international air service. This
publication deals almost entirely with the inter-
national part of its operations, which account for
roughly 40% of passengers carried and 75% of pas-
senger miles.
2. CSA belongs to the "Six Pool" agreement,
an association formed in 1957 among airlines of the
Warsaw Pact. This agreement provides for cooper-
ation among members on intra-Communist services,
fares, technical support, and the pooling and divi-
sion of revenues. Some of the prestige garnered
by Czechoslovakia's long-standing membership in
ICAO has been diluted during the past four years,
because most East European countries have joined
the organization, with the Soviet Union becoming a
member in November 1970.
3. CSA's international network expanded vig-
orously during most of the 1960s. The airline's
existing routes within Europe were extended to
several cities in the Middle East, and new routes
were opened to Africa, South and Southeast Asia,
and Cuba. By the end of 1968, CSA's services
included stops in 32 non-Communist countries,
including several added as extensions or intermediate
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stops along existing routes. Many of these new
services were inaugurated because of Czechoslovakia's
growing economic and political interest in various
less developed countries (LDCs), and some proved
to be unprofitable.
4. By 1968 this rapid expansion, particularly
the addition of several low-volume stops, led to a
combination of problems, notably (a) the existence
of many middle-managers not attuned to modern air-
line management techniques and (b) the lack of
enough modern aircraft, which led to a gradual
deterioration of service and prevented frequent
and competitive service along the more profitable
European routes. The situation was aggravated by
the concurrent slowdown in the growth of worldwide
international passenger traffic.
Reorganization
5. In view of its foundering international
operations, CSA underwent a major reorganization
beginning in late 1968. Existing routes were
restructured to handle new, more efficient Soviet
aircraft -- the TU-134As and the IL-62 jets.1 New
1. The TU- 34A is a rear-mounted twin turbofan jet
medium-range aircraft (1,500 to 2,000 miles) with
a capacity of 76 passengers. The IL-62 is a long-
range jet aircraft (4,000 to 5,000 miles) with four
rear-mounted turbofan engines and an average first
class/tourist configuration capacity of 148 pas-
sengers.
5
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services along more profitable international routes
were added while other less profitable routes were
canceled. Concurrently, many middle-management
positions were eliminated or filled with adminis-
trators more acquainted with modern airline oper-
ations.
6. Since 1968, six TU-134As and four IL-62s
have been purchased from the USSR and are currently
in use on most of CSA's international routes. In
addition, ten air agreements have been signed or
updated since the reorganization, including those
with Canada and the United States, which allowed
inauguration of CSA flights on the lucrative North
American market. Several low-volume routes were
canceled, including ones to Conakry in West Africa,
to Dubai in the Middle East, and to Ranqoon and
Phnom Penh in Southeast Asia. CSA's flights to
these cities began in the early 1960s, when polit-
ical and economic penetration and not air-traffic
potential or profitability were the criteria. A
changing political climate and cost realities
prompted the cancellation.
CSA Today
7. CSA's international service schedule is
second only to Aeroflot's among all the Warsaw Pact
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airlines in the number of non-Communist countries
served (see Table 1). Its network outside the
Table 1
Warsaw Pact Airlines:
Comparison of International Civil Air Service
with Non-Communist Countries, Cuba, and Yugoslavia
1968-69
1972-73
Route
Net-
work
(Miles)
Coun-
tries
Served
Flights
Per
Week
Route
Net-
work
(Miles)
Coun-
tries
Served
Flights
Per
Week
East European
CSA (Czecho-
slovakia)
34,500
32
38
41,200
35
56
BALKAN
(Bulgaria)
11,250
17
18
17,950
21
28
Interflug
(East
Germany)
8,000
10
9
14,925
13
18
LOT (Poland)
16,100
15
34
17,700
19
47
MALEV
(Hungary)
13,300
18
24
14,825
20
39
TAROM
(Romania)
11,050
14
20
13,600
16
26
Soviet
Aeroflot
63,300
39
52
81,000
52
79
Warsaw Pact countries now stretches some 41,000
unduplicated miles from Prague to New York, Jakarta,
Scandinavia, and Africa and includes service to
all the countries of the Warsaw Pact, Cuba, Yugo-
slavia, and 33 non-Communist countries (see Figures
1 and 2). These routes are concentrated in Europe,
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where about three-fourths of CSA's more than 75
weekly flights operate. Most of the flights having
longer hauls are limited to only weekly or twice
weekly service. All but two of CSA's scheduled
international flights operate out of Prague's Ruzyne
International Airport.
8.. While CSA remains at the forefront of East
European aviation, it is not large in comparison
with many small Western carriers, particularly in
the frequency of flights. For example, although
the small but respected FINNAIR serves about half
the countries and has half the route network of
CSA, it operated twice the international flights
and carried more than twice the passengers in recent
years. Among the airlines of less developed coun-
tries, CSA is most comparable with Egypt's Egyptair
in terms of countries served, route networks, flights
per week, and passengers carried.
New Air A reements and Service
9. The pace of Czechoslovakia's civil air
accords has slowed since 1968, compared with the
flurry of activity earlier in the decade (see the
Appendix). This slowdown is the direct result of
the airline's 1968-69 reorganization, which resulted
in more selectivity in choosing new services and
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routes. The most important of the ten new or
updated agreements was the US-Czechoslovak air
accord signed in November 1969. As part of the
expected CSA service to North America, the Czechs
signed an agreement with Canada in mid-1969, where
previously CSA had only a transit permit to stop
on the Prague-to-Havana flights. The other Czech
air agreements signed over the past five years
include Luxembourg and Norway in 1968 and Malaysia
in 1969. In addition, a provisional agreement with
Singapore was replaced by a formal bilateral air
agreement in 1969 and an earlier Pakistani agree-
ment was updated. No new accords have been signed
since 1969, but existing agreements with West
Germany, Indonesia, and India have been updated.
Prague - New York Flights
10. Czechoslovakia's status in international
aviation was enhanced by the signing of a bilateral
air agreement with the United States in November
1969 and by CSA's inauguration of Prague - New York
service in May 1970. The actual agreement stemmed
from Czech initiated contacts that began as early
as 1965 and were first formalized at an April 1967
meeting in Prague. These talks faltered because
of Czech intransigence on the issue of allowing
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Pan American Airline (PAA) to conduct business in
Czechoslovakia -- ticket sales and the right to
convert and remit currency -- as well as agreements
on arbitration procedures and routes. Informal
negotiations were resumed a few months later by the
two airlines, PAA and CSA, but differences were
not resolved.
An Accord
11. After several months, Czech officials made
a firm decision to attempt to gain North Atlantic
rights, and a Washington meeting was held in Jan-
uary 1968. Although the Czechs had indicated a
willingness to compromise on the unresolved issues,
it took more than a year to settle differences to
the satisfaction of the United States, which insisted
on specific provisions to guarantee US carrier
rights.
Difficulties
12. From the inception of CSA service, which
began on 4 May 1970 with twice weekly IL-62 service,
Czechoslovakia and CSA did not live up to the
agreements concerning the commercial rights of PAA.
10
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During the first two years, problems arose con-
cerning ticketing and the methods of payment, par-
ticularly of Czech nationals. For example, it was
not possible for Pan American to sell tickets for
convertible currency to Czechoslovak nationals.
As a result, PAA's ability to attract Czech pas-
sengers for flights out of Prague was severely
restricted.
13. At a meeting in February 1972, US officials
highlighted Czech failures to fulfill provisions
of earlier agreements as a counter to Czech requests
for an increase of CSA's service to New York. The
Czechs were genuinely concerned about the US atti-
tude and the possibility of the cancellation of
CSA service. After the Czechs finally agreed to a
more tightly worded provision of PAA's commercial
rights, the parties in May 1972 extended the
arrangement for another two years.
14. Since the extension, PAA's overall situation
has not improved, and still another problem has
surfaced. Last summer, CSA operated numerous extra
sections of their scheduled Prague - New York
flights in an apparent effort to circumvent the
agreement's provision for twice weekly service.
The Czechs were advised in July of US concern over
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the extra flights. At the same time the United
States recognized that some additional service may
have been justified and, as a special measure,
approved a third weekly CSA flight for the 1972
summer season. Following this US action, CSA's
extra flights decreased, but the problem may surface
again this summer.
Other New Service
15. Since 1968, several routes have been added
to CSA's network. Weekly flights were inaugurated
to Kuala Lumpur and Singapore in April 1970 as
intermediate stops on the already existing route
to Jakarta. In May 1970, Tripoli was added as an
extension of existing flights to Tunisia. A short-
lived service between Prague and Luxembourg, which
began in 1969, was canceled in mid-1970. The only
major change in service between mid-1970 and mid-
1972'occurred when CSA resumed its Prague-Havana
flights in November 1970 following an 18 month
suspension due to a lack of suitable aircraft.
In June 1972 Madrid was included on CSA's weekly
flights to West Africa.
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Fleet Inventory
16. CSA relies solely on Soviet manufactured
aircraft for its domestic and international airline
operations. Through 1968 the airline's expansion,
frequency of service, and load factors were con-
strained by a shortage of modern aircraft. Begin-
ning in 1969 the Czechs attempted to remedy this
deficiency by ordering TU-134A and IL-62 aircraft,
two of the Soviet Union's more modern jets. Despite
these newer additions, only about one-third of CSA's
current fleet inventory are jet-powered, as shown
in the following tabulation:
Total
45
Jet
16
IL-62
4
148-passenger (first class/
tourist configuration) long-
range turbofan
TU-104A
4
100-passenger medium-range
turbojet
TU-124
2
44-passenger short-to-medium-
range turbofan
TU-134A
Turboprop
6
76-passenger short-to-medium-
range turbofan
IL-18
7
85-passenger medium-to-long-
range turboprop
Prop
IL-14
22
24-passenger short-range pro-
peller
17. The small number of modern jet aircraft
have been used mostly in Western Europe. For ex-
ample, 41 of the 56 weekly flights to non-Communist
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countries in winter 1972-73 employed TU-134As (33
flights) and IL-62s (8 flights). In contrast, 11
of the 20 flights on CSA's intra-Communist routes
still use the aging TU-104As and IL-18s. CSR's
IL-14s and some of the IL-18s are used in domestic
service.
Passenger Traffic
18.
carried
carried
service
Of the estimated 1.6 million passengers
by CSA in 1972, approximately 60% were
in domestic service and 40% in international
(see Table 2). CSA's international passenger
Table 2
Czechoslovakia: State Airline Passenger Service
Thousand Persons
19722
920
675
1,595
1971
810
589
1,399
1970
901
534
1,435
1969
926
545
1,471
1968
950
409
1,359
1967
1,010
383
1,393
1965
975
270
1,245
1960
639
115
754
1. Including air taxi services.
2. Estimated.
traffic dropped in 1970, the first decline in many
years. International traffic has resumed its upward
trend, reaching an estimated 675,000 persons in
1972. Following four successive years of decline,
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domestic carriage rose to an estimated 920,000
persons in 1972, some 110,000 more than in 1971
but below the peak of more than one million in 1967.
19. The turnaround in international passenger
service is due to a combination of factors. Most
important is the full implementation of the reorgan-
ization, including the effective integration of
the IL-62 aircraft and a few TU-134As, augmented
by improving trends in worldwide passenger traffic.
The increase in domestic passenger service in 1972,
following several years of decline, is attributable
to the assignment of three additional IL-18s to
this service.
20. In 1971, Czechoslovakia formed a small,
new airline -- Slov-Air -- as a short-haul domestic
carrier using the 17 passenger Czech-manufactured
L-410 aircraft and as an international chartering
service using aircraft leased from CSA. To date,
Slov-Air has had no material effect on CSA's
scheduled domestic and international operations.
Safety
21. All Communist airlines restrict reporting
on civil air accidents. During the 1950s and well
into the 1960s, several major air accidents in
Warsaw Pact countries were not reported at all.
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During the past few years, however, the quality of
air accident reports from Communist sources grad-
ually has improved and frequently is augmented by
the Western press. The improvement is largely the
result of increased Western presence in the USSR
and Eastern Europe.
22. CSA's safety record -- grounded in a fairly
reputable maintenance program -- seems comparable
with other airlines of a similar size. During the
past decade, CSA has had only two known major
crashes involving the loss of life. The first
occurred on 5 September 1967, when an IL-18 on the
Prague-Havana flight crashed on take off from
Gander, Newfoundland, killing at least 34 of the
69 persons aboard. On 1 June 1970 a TU-104A crashed
while attempting to land at the fog-shrouded Tripoli
International Airport in Libya, killing all 13
aboard.
Prospects
23. During the next few years, CSA is expected
to continue to emphasize the tenets of the 1968-69
reorganization. Operations will continue to be
streamlined, while selective new services will be
added and a few new aircraft acquired. Among the
new services being considered are extensions of
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existing routes to Mexico City, Rio de Janiero,
Buenos Aires, Tokyo, Sydney, and Hanoi. These
extensions would strengthen CSA's overall route
network and improve the airline's traffic potential
without requiring large numbers of new aircraft.
24. Despite known Czech dissatisfaction with
the overall performance of their Soviet aircraft,
it is almost certain that CSA will continue to
operate a totally Soviet-built fleet for at least
the next few years. The Czech airline has an im-
mediate need for a half dozen medium- and long-
range aircraft, and three more IL-62s and five new
TU-154s2 are scheduled for delivery in 1973-74.
Moreover, in talks with Boeing last fall, which
focused on a spare parts inventory-management plan
for CSA, Czech aviation officials said that no pur-
chases of US aircraft are on the horizon.
2. The TU-154 is a jet aircraft having medium to
longer range (2,000 to 2,800 miles), with three
rear-mounted turbofan engines and a capacity of
about 140 passengers.
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Czechoslovakia: Civil Air Agreements with Non-Communist
Countries, Cuba, and Yugoslavia as of April 1973
Afghanistan
1961
Algeria
1.964
Austria
1962
Belgium
1957
Burma
19651
Cambodia
1964
Canada
1961,2
1969
Cuba
1960
Cyprus
1967
Denmark
1947
Egypt
1958
Finland
1949
France
1954
Ghana
1961
Greece
1964
Guinea
1961
India
1960,
1972
Indonesia
1968,
1972
Iran
19612
Iraq
1960
Ireland
19622
Italy
19603
Kuwait
N.A.
Lebanon
1961
Libya
N.A.
Luxembourg
1968
Malaysia
1969
Mali
1961
Morocco
1961
Netherlands
1947
Norway
1968
Pakistan
19694
Senegal
1962
Sierra Leone
N.A.
Singapore
1967,3 1969
18
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Spain
N.A.
X
Sudan
1966
Sweden
1957
x
Switzerland
1947
x
Syria
1958
x
Tunisia
1963
x
Turkey
1963
x
United Kingdom
1960,
1961
X
United States
1969
X
West Germany
1964,3
1971
X
Yugoslavia
1956
X
1. Limited to cargo-carrying rights.
2. Transit agreement. In the case of Iran a formal bilateral air accord was
probably signed sometime after the transit agreement.
3. Provisional agreement.
4. Replaced earlier agreement.
19
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IL
ii
Mr. John S. Meadows
Director
Office of Aviation
Bureau of Economic Affairs
Department of State
Mr. Michael H. Styles
Chief, Aviation Negotiations Division
Office of Aviation
Bureau of Economic Affairs
Department of State
Mr. Henry Snowden
Special Assistant to the Director of
Transportation and Communications
Bureau of Intelligence and Research
Department of State
Mr. Charles O. Gary
Director
International Aviation Affairs
Federal Aviation Agency
p The Honorable Robert D. Timm
Chairman
Civil Aeronautics Board
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Czechoslovakia's International Civil Airline
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