Polish Airline LOT wins state aid with EC approval
Polish flag carrier LOT envisions brighter future as the European Commission approves a state aid for the airline facing, in the recent years, the risk of bankruptcy.
Apart from the infusion of funds, the EC’s decision also means that the carrier will not have to return the 100 million euros aid already received from the Polish state in 2012. This, together with multi-level restructuring changes in course, allows to hope that the airline will “bounce back” fom the crisis and regain the long-term financial viability. So far the numbers look optimistic: in 2013 LOT registered its first net profit in five years.
LOT cuts costs
After a thorough investigation, EU gave merit to the advancement of restructuring plan implemented by LOT. The measures undertaken included a 35% cut in the ground personnel, closing several routes and reducing operating coast through elimination the older aircrafts from the fleet and replacing them by new, fuel-effective models, such as, for example Boeing 787 (the Dreamliner).
Renegotiating of the contracts with the airline’s suppliers is the next step in the cost-cutting quest.
Strategic investor for LOT needed
Polish state help extended towards the flag carrier implies that the airline must find a strategic investor.
The last known potential investor, Turkish Airlines (Turk Hava Yollari AO) withdrawn their interest in the airline in 2011, due to European Union rules restricting outside ownership. Currently Polish state owns 93 percent of LOT, while the remaining 7 percent is distributed between the staff.
LOT is said to be negotiating with other potential investors, refusing however to disclose any further information.
LOT - award winning Polish airline
Established in 1929 LOT, or Polskie Linie Lotnicze LOT, is not only one of World’s oldest airlines, but also one of the most important carriers in Central and Eastern Europe.
In 2014, LOT received the prestigious Frequent Business Traveler GlobeRunner Award in the 'Best Airline in Europe, Middle East and Africa' category. Travel business-related entities, such as hotel chains, car hire operators or airlines are eligible for the prize, provided they comply with the highest standards of services.