LOT Polish Airlines stated (04-Sep-2013) it would not apply in Sep-2013 to the Treasury for payment of the second tranche of public aid. The carrier said this is "possible thanks to the promising results of the Restructuring Plan consistently implemented in the Company". At the same time LOT is introducing the flight schedule for the winter season 2013/2014 to its reservation systems. A new network is in line with the Restructuring Plan submitted by the Ministry of the Treasury to the European Commission. It is also a result of necessary compensation required by the European Commission. The first tranche of aid for LOT was paid in Dec-2012 and disbursement of the second was planned for Aug-2013, although the carrier has not applied for this in either Aug-2013 or Sep-2013. The company noted, "An amount of the second tranche will be carefully assessed when the Company will apply to the Treasury for its payment. Perhaps this will happen only in October". LOT Polish Airlines Sebastian Mikosz explained, "Improved financial performance, and thus the delayed application for the second tranche, is an effect of consistently implemented restructuring measures. Thanks to them, the result of the core business in the first half of the year was better by 29 million than assumed in the plan. Next months also fit in with this positive trend . The improved result is possible mainly due to sharp costs cutting, while enhancing sales and due to changes in the offer aimed to generate additional revenue". The carrier also outlined how it has, in recent months, ntroduced several new services for passengers as well as a new standard of service for European services. Distribution channels have been extended by introduction of a mobile version of www.lot.com and applications on smartphones and tablets. The carrier has also suspended a number of unprofitable services. [more - original PR]
LOT improves its results, will not apply for the second tranche of public aid
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On 8-Sep-2016 LOT Polish Airlines announced its "2020 profitable growth strategy". This involves a goal to achieve "sustainable viability", after a restructuring programme which returned LOT to operating profit in 2014 after six loss-making years. Its privatisation may even be back on the agenda.
LOT currently ranks behind LCCs Ryanair and Wizz Air by share of traffic in Poland, which offers superior traffic growth potential versus Europe as a whole. The airline aims to increase passenger numbers from 4.3 million in 2015 to 10 million in 2020, growing its fleet from 43 to 70 aircraft. LOT's expansion will focus on long haul, particularly North America and Asia, where it currently has only five routes and where competition is considerably lower than on short/medium haul. Initial plans include the launch of Warsaw-Seoul this winter and a return to Warsaw-New York Newark next summer.
According to data from LOT, its restructuring has left it with a fairly efficient cost base by legacy airline standards and this will be important in competing with LCCs (but there is still a cost gap with LCCs). LOT's growth will focus on long haul but will need short-haul European feed – and partnerships. Although LOT no longer appears to be considering leaving the Star Alliance, it remains excluded from American and Asian JVs. Further, those JVs preclude members from working with LOT. Partnership growth will be as critical as it will be challenging.
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