LOT flag carrier in financial troubles

MAG
opublikowano: 06-08-2008, 17:15

Warsaw (Puls Biznesu) – The airline’s losses get bigger. It will take a long time to get out of the red and the IPO may be postponed.

LOT will need to restructure earlier than planned. Dariusz Nowak, the company’s CEO, stresses that financial results make it urgent. In the first half of the year, the company increased its net loss from PLN 101m (EUR 31.2m) in the first quarter to PLN 130m.

“As compared to the first six months of 2007, sales dropped by PLN 110m while costs grew. We forecast that this year, they will fall from PLN 2.98bn to PLN 2.86bn. EBIT will drop from PLN 73m to minus PLN 216m or even PLN 275m”, Konrad Tyjarski, deputy CEO for financials said.

The forecast is based on updated fuel prices and expected drop in passenger numbers.

The restructuring plan aims to increase sales, cut costs by increasing profitability of the employees, restructuring of LOT subsidiaries, better cooperation with Star Alliance and PPL airport operator. Jacek Ksen, LOT chairman stresses that the future depends heavily on negotiations with trade unions. Pilots want raises and threat with strikes.

The first effects of the restructuring plan to be approved on August 19th, will be visible early in November. LOT should come out of the red in 2010. This may mean difficulties with the IPO planned in 2009.

(PLN 1 = EUR 0.309)

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Podpis: MAG

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