European Commission approves LOT bailout

Head office of LOT Polish Airlines; Photo courtesy Wikimedia Commons/author Kpalion

“LOT has prepared a credible restructuring plan that should make it a viable company in the near future,” said Commission Vice President in charge of competition policy Joaquin Almunia.

“At the same time, it gives up some profitable routes and slots at several congested airports, which creates opportunities for its competitors and reduces the competition distortions brought about by the aid,” he added.

In December 2012, LOT Polish Airlines received its first tranche of aid to the amount of 400 million zloty (around 100 million euro), while the EC temporarily approved the rescue loan in May 2013 on the provision that a plan for the airline was drawn up by the Polish government.

A month later a restructuring plan for LOT was filed with the EC, containing future plans for the troubled state-owned airline.

“The investigation revealed that the restructuring plan, which aims at restoring LOT’s viability by 2015, is based on realistic assumptions and should enable the company to return to long-term viability within a reasonable timeframe,” the European Commission released in a statement.

Furthermore, “LOT’s actual financial results in 2013 were already better than expected and the company reported a net profit for the first time since 2007,” the statement reads. (jb)

Source: PAP/EC