After receiving a $127 million emergency loan from the Polish government, LOT Polish Airlines will be restructured by the state to return to profitability.
LOT announced in December that it had lost passengers during the second half of 2012 leading to heavy losses that required state aid to keep the airline flying. LOT lost 200 million zlotys ($63.7 million) during 2012.
The Polish government holds 93% of LOT's shares. The state-backed loan may be declared an illegal subsidy by the European Commission.
The government has stated that the airline needs to be restructured with a view to privatizing it. The first phase of restructuring will involve LOT returning half its fleet to lessors and scale back its network to only profitable routes with LOT’s domestic routes being taken over by another airline.
Treasury Minister Mikolaj Budzanowski said: "At least 30% or much more of headcount will be restructured, which is already taking place in the first quarter…there will be a fleet restructuring, with the focus on the most effective planes—some 25 of about 40 airplanes LOT has. The rest that are generating losses will be returned. Leasing agreements were signed years ago and it's not profitable to be using those planes anymore."
LOT to be restructured
