Decision on Centralwings low-cost carrier in June

MAG
02-05-2008, 11:40

Warsaw (Puls Biznesu) – It would be too expensive for LOT to close Centralwings, its low-cost subsidiary, according to  preliminary analyses. Decisions concerning the loss-generating company will be  made in June.

Soon, decision will be made at LOT flag carrier concerning its low-cost subsidiary. After Centralwings presented very bad 2007 results (PLN 73m, or EUR 21.1m of net loss), Zdzislaw Gawlik, deputy minister of the treasury responsible for the sector, said that the no-frills carrier could be even closed down. Jacek Ksen, the chairman of the supervisory board, admitted that different variants were being taken into account. According to preliminary analysis ordered by LOT management, it would cost too much to close Centralwings. This would disturb LOT’s listing on the Warsaw Stock Exchange. Centralwings would have to withdraw from leasing planes, which would cost PLN 200m. Contracts with touroperators would have to be cancelled, which would additionally increase the costs.

“Different variants are being prepared, we will discuss them during the meeting in June. Numbers will be decisive”, Jacek Ksen said.

LOT considers acquisition of charter operations which generate income.

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