ne of the main objectives of the monitored period was to formulate an updated business and marketing strategy for CSA and to ensure its realisation. After a thorough analysis of prevailing market conditions and of the situation in the field of air transport - main customer target groups were defined.

Those individual passengers in Travel Class who are currently major CSA customers, and Business Class passengers, have been determined as priority target areas for CSA. Also, considering the limited potential of the market in the Czech Republic, Europe has been selected as the dominant territory for CSA. Within the framework of this updated business strategy, CSA will intensify some of its current connections by increasing the number of flights and will begin to operate regular flights to destinations which have been, up to now, missing from the timetable. To achieve this goal, CSA will develop bilateral cooperation with other airlines. Those flights where cooperation is not feasible, will be operated independently.

Ÿ TIMETABLE The delivery of new aircraft, together with the finalised first stage of reconstruction to Prague-Ruzynì Airport, has enabled further development of the system of arrivals and departures - concentrated into six connecting waves. A compact CSA fleet of only three aircraft types for regular transport adds to the better arrangement and easier understanding of the timetable for CSA customers.

CSA introduced four new regular routes in the course of 1998. In February, CSA airplanes connected Moscow and Karlovy Vary for the first time, and since the end of March, coinciding with the summer timetable, flights began from Prague to Oslo, Norway, to Nice in France and to Bologna in northern Italy. In addition to this, in June, a regular flight from Prague to Damascus was renewed.

The results of all newly introduced flights fulfilled anticipations for their first year of operation in 1998. The best results were shown by the new connection to Oslo, where the interest of customers considerably exceeded expectations and the flight showed a profit in its first season of operation.

Besides opening new destinations, CSA intensified some of its current connections. Operation to Stansted Airport on the Prague-London route, was intensified at the beginning of the summer timetable and the number of flights between Prague and Moscow, Prague and Riga and Prague and Sofia were increased as well. Additionally, the capacity on flights to Copenhagen, Warsaw and some other destinations was increased. Beginning with the 1998/99 winter timetable, CSA increased its number of connections to Tel Aviv, and in cooperation with Alitalia began to offer up to twelve weekly flights between Prague and Milan. Since mid-October, the operation of the Karlovy Vary-Moscow flight was extended to two flights per week.

Ÿ PARTNERSHIP WITH OTHER AIRLINES Thanks to successful cooperation with other airlines, CSA extended some of its current connections, particularly on the European continent.

Beginning in June, CSA succeeded in increasing its cooperation with the Dutch airline KLM. This increased cooperation offers passengers a more advantageous connection between Prague and Amsterdam, up to four times a day.

Close bilateral cooperation with Lufthansa on the Prague-Munich route continued in 1998. In November, it was extended to Prague-Stuttgart and Prague-Düsseldorf flights.

On 1 October 1998, CSA began the first stage of closer cooperation with Transaero Airlines, a Russian airline, in the form of code-share cooperation on CSA flights operated on the Karlovy Vary-Moscow route and return. After the full implementation of this agreement, CSA will be able to enter the important market of the Commonwealth of Independent States by offering quality air connections between Prague and several destinations, via Moscow, to points within the Commonwealth of Independent States.

Cooperation with Swissair was also extended. In addition to Prague-Zurich, there is a Prague- Geneva flight. While Swissair cancelled its Geneva route, this flight is still being carried out by CSA airplanes.

Based on a code-share agreement, the code of the Italian company Alitalia, in addition to flights to Milan and Rome, also appeared on flights between Prague and Bologna.

An agreement with the Bulgarian airline Balkan, was another addition to a long list of bilateral code-share agreements. This agreement enabled CSA to extend operations and for the Bulgarian carrier to participate in CSA expansion.

Since June, cooperation with Romania's Tarom has also begun, on the Prague-Bucharest-Damascus route. The possibility of the commercial utilisation of capacity on the Bucharest-Damascus sector under Tarom's code, enabled CSA to renew operation to the Syrian capital after a break of half a year.

Successful cooperation also continued with other European carriers: Air France on the return-flights Prague-Paris and Prague-Nice, with Austrian Airlines on flights to Vienna and back, with the Polish airline LOT on the Prague-Warsaw route, and with the Hungarian airline Malev on flights to Budapest and back.

CSA has been cooperating with its American partner, Continental Airlines, on flights to New York and to a further 25 cities within the United States since 1996. Continental has also placed its code, in addition to the current Prague-New York route, on connecting flights from Prague to Bratislava and Košice. Besides the joint operation of flights, cooperation with Continental also includes, close marketing cooperation, the coordination of timetables and sales policy, and linked Frequent Flyer programmes.

CSA also cooperated with the regional carriers Air Ostrava and Tatra Air in operating regular short-distance flights between Prague and destinations in neighbouring countries (Berlin, Hanover, Košice and Bratislava).

At the beginning of January 1998, CSA signed the Inter-Carrier Agreement which sets out the responsibility of air carriers when compensating for damages. Other distinguished airlines are also signatories of this agreement, which is at the same time, the highest form of a carrier's liability.

CSA diplomacy also proved successful at a meeting of the AEA (Association of European Airlines) which took place in Berlin at the end of October.The activities of AEA are coordinated by a Òpresidential committee of eight, the members of which are the highest representatives of Lufthansa, Alitalia, British Airways, Air France, Swissair, KLM and British Midland.The president of CSA, Mr. Anton™n Jakubäe, was elected to fill the vacant eighth position during the Berlin meeting.This election meant the international recognition of CSA as a quality and competitive modern airline.

Ÿ PRODUCT In 1998, the product offered to CSA passengers in the two travelling classes experienced several changes. An important innovation was the changeover to become a completely non-smoking airline. Furthermore, CSA extended its children's programme - to keep its youngest passengers occupied even more during a flight. On longer flights children get various toys, colouring books, puzzles and games.

In the course of 1998, Boeing 737 aircraft were equipped with convertible seats, which enable the modification of seat configuration to 2+2 in a row in Business Class, against the usual 3+3 in a row. It provides passengers with greater comfort and personal space.

Aimed at obtaining information on how CSA clients perceive the company and what type of services they require, a new system of CSA product evaluation was introduced in the autumn of 1998. Certain passengers on a given flight, employees of the company, and the dedicated OK Plus customers, all may express their opinion on the quality of offered services through special questionnaires. Passengers, selected at random, evaluate for example: the check-in procedure at the airport, the conduct of check-in and flight personnel, the availability of necessary information at the airport terminal, etc. The main part of the questionnaire is dedicated to the evaluation of services during a flight, e.g. the quality and amount of refreshments, seat-comfort, amount of information obtained during the journey, duty-free sales, etc. A similar questionnaire is filled in by CSA employees and the largest group of respondents is OK Plus programme members, who receive the questionnaire at their contact addresses. All questionnaires are carefully analysed and the information obtained is used to increase the quality of services offered by CSA, in line with what customers actually want.

Ÿ PROMOTION In the field of promotion, CSA used a design surrounding the 75th anniversary of the foundation of the company during the whole of 1998. An official logo was conceived in 1997 and the following year it became part of the presentation of the firm, being found on correspondence and all documents. The anniversary was even projected in one of the promotional campaigns that CSA created in cooperation with the advertising agency Ammirati Puris Lintas for television and the print media. This campaign aimed at bolstering the CSA image and increasing awareness of CSA among potential customers. A product campaign, focused especially on the promotion of new flights, the children's programme and the improved quality of the Business Class in Boeing 737 aircraft, supported already available information about CSA's services. Smaller campaigns, particularly in the print and broadcasting media also helped to promote the new product.

Ÿ MARKETING PROGRAMMES There was increased promotion of the advantages of the OK Plus Programme among the company's clients in 1998. An additional 14 898 CSA passengers expressed their interest in membership, which meant bypassing the forty-thousand mark in registered members. At the end of the year, 40 784 customers held the membership card. Together with this growth in the number of customers, the OK Plus Programme partner-network is extending, especially among hotels.

Additional marketing programmes - CSA Partner and CSA Info - are focused on the support of travel agencies and CSA commercial representations, including their clientele. The CSA Partner Programme helps obtain current information on CSA events for travel agencies in the Czech Republic. With CSA Info, information is provided to clients or travel agencies abroad in the field of culture, transport, sales and services, in cooperation with CSA representations worldwide. CSA also sponsors selected congresses, conferences, symposia, festivals, sporting events and fairs or exhibitions held in the Czech Republic. By offering advantageous ticket prices for participants of such events, CSA becomes an official carrier for some international events. In 1998, CSA supported 23 international functions, in which 18 000 delegates from all over the world participated. Considering the fact that Prague is becoming a favourite city for congresses and conferences, we may expect the number to grow in the coming years.