Final Word from Tuesday, June 17, 2008
An earnest debate over the future of Prague Airport is only beginning, but the window of opportunity for selling it at a top price could be closing fast. Investors might be willing to pay 100 times earnings now, but such a valuation would assume a significant increase in capacity and/or fees. Who knows, though, how much jet fuel will cost in a year or two. Analysts say that all European airlines would be in the red if oil rose to $200/barrel. Adding destinations wouldn't be a top priority under such a scenario. There's no guarantee, in fact, that Prague will ever really need its much-coveted new runway. Without it, the new owner would be forced to make its money by raising fees and concessions, which are already a sore point with Czech travelers. The longer the government waits to sell Prague Airport, the more Czechs will ask whether it's in their best interest for it to be sold at all. [Czech Republic Letiště Praha taxes]
Glossary of difficult words
earnest - serious;
100 times earnings - CEO Miroslav Dvořák of Prague Airport said on Václav Moravec's debate show on Czech TV that he doubts investors will again be willing in the future to pay Kč 100bn for an airline earning Kč 1bn;
to covet - to yearn to possess [much of the discussion about the airport centers around the price to be paid for runway land owned by Penta];
fees - such as landing fees, which are passed on to passengers;
concessions - in this sense, the amount charged for operating shops and restaurants.