Polish government to give 100 million euro aid to LOT national airline
PR dla Zagranicy
Peter Gentle
12.12.2012 08:57
Poland's national carrier LOT has asked the government for 400 million zloty as the first part of an aid package for the ailing airline, the Finance Ministry has confirmed.
photo - lot.com.pl
“The Ministry of the Treasury has been preparing to assist the public company for a month now,” confirms Katarzyna Kozlowska, a spokeswoman for the Finance Ministry, adding that the finance package, which could be worth up to one billion zloty (250 million euro) in total, will be tied to job cuts and other cost cutting measures.
“In consultation with the ministry, the airline is preparing a restructuring plan,” she says.
The announcement that LOT has gone cap in hand to the government differs from a statement by the airlines CEO Marcin Pirog, who claimed in September this year that the company's financial condition is good in comparison with other European carriers.
Polish Radio is reporting that the 100 million euro payment by the Polish government is part of a wider attempt to improve the finances of the national carrier, with an approach by the Treasury Ministry to the Chinese to invest in the company, with Deputy Treasury Minister Rafał Baniak having talks with Air China on the issue last week.
The Chinese government has not confirmed the report, however.
In June, Turkish airlines announced that it was backing away from plans to purchase shares in the debt-laden company.
“I won’t deny that we were upset,” Marcin Pirog told Polish Radio in the summer. “Our Turkish partners who explained that their main reason for halting the negotiations was that after speaking to our lawyers they understood that they would not have factual control over the company.”
LOT has not commented on the reports of the 400 million zloty payment by the Treasury Ministry, which owns 68 percent of the airline, though it is thought that the government will give more to the national carrier if it is satisfied with the restructuring scheme.
“The restructuring program must first be consulted with employees,” Leszek Chorzewski, spokesman for LOT Polish Airlines told the Gazeta Wyborcza daily.
LOT posted a loss of 145m zlotys (35 million euro) loss in 2011 but hopes to be in the black at the end of this year. (pg)