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LOT Polish Airlines seeks Star Alliance flexibility as it grows long haul to Bangkok, Seoul & Tokyo

Analysis

LOT Polish Airlines, completing a restructuring, is planning to double in size by 2020 and launch additional service to North America and Asia, where new routes to Bangkok, Seoul Incheon and Tokyo Narita have been announced. Two more long-haul routes will be announced in autumn 2015 and by 2020 LOT plans to have 10-12 long-haul routes as it becomes the hub for "the new Europe" across Eastern and Central Europe, where there is growth but no clear domination yet by Aeroflot, Air France-KLM, IAG or Lufthansa. Yet LOT's "new" world is actually an old, restrictive world where fellow Star Alliance carriers can veto even internal partnerships, which will hurt LOT's long-haul performance. LOT's position is reflective of other carriers feeling constrained from larger members across all of aviation's global alliances.

LOT prefers to remain in Star but provided it gains greater participation. It hosted the bi-annual board meeting in late Jun-2015 in hopes of gaining leverage. LOT needs a few years to prove its new strategy to potential strategic and equity partners but an alliance decision may be needed in the short-term: a change in alliance rules means Star carriers can leave by 31-Dec-2015 without paying exit fees, which can be very substantial.

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