Czech light sport aircraft suffer from fluctuating currency rates

London
Source: Flightglobal.com
This story is sourced from Flightglobal.com

Czech manufacturers of light sport aircraft are losing money due to the constantly appreciating local currency against both the dollar and the euro, forcing the airframers to acquire components and materials abroad to avoid currency fluctuations.

"Since the start of 2008, we have been focusing on the European Union which now accounts for four-fifths of these purchases, the remainder being from Czech Republic," says TL Ultralight executive Barbora Hubená.

The company, based in Hradec Kralove in the north-east of the country, says it continues to lose CKr3 million ($184,000) a month due to an unfavourable exchange rate.

The increasingly strong crown is a concern for the country's big aircraft makers too. Aero Vodochody president Peter Odro says the company's profit for 2007 fell by CKr40 million as a result of the depreciating dollar.

Not everyone is complaining, though. "We are able to manage the effects of the weak dollar pretty well," says Chip Erwin, chief executive of one of the country largest general aviation aircraft manufacturers Czech Aircraft Works.

The company pays for 44% of the material it needs in the US currency, the remaining 56% being equally divided between the euro and the crown. Czech manufacturers of light sport aircraft account for 31% of the respective market in the USA.