Polish flag-carrier LOT has turned in a profitable full year despite the Covid-19 pandemic’s interruption of its strategic plan and the subsequent conflict in Ukraine.
LOT says it turned in an operating profit of zl1.13 billion ($289 million) and a net profit of zl1.07 billion, on revenues of zl10.12 billion for 2023. Revenues were up by nearly 22%.
Operating costs, it says, rose by 8% to just over zl9 billion.
LOT says it had been following a five-year strategic plan for profitable growth over 2016-20 which could not be fully implemented, owing to the pandemic, even though it was achieving “effective fulfilment” of its objectives.
After scaling back operations and taking steps to cut costs, the airline emerged from the crisis only to face the effects of conflict in Ukraine which forced closure of several routes, limited passenger flows and led to longer routes to Asia.
But LOT states that it has recorded “dynamically recovering demand” since the beginning of 2023, adding that other carriers in its market have experienced operational and capacity limitations.
This has enabled LOT to achieve high revenues and load factors, it adds.
LOT says it has “compensated” for the route closures – and the loss of passengers from Ukraine, Belarus and Russia – with services to new European destinations from both Warsaw and other regional airports.
The airline says its steps to reduce the impact of conflicts, including that in Gaza, on its operations have included reinforcing its presence on Central European and Balkan routes – among them Prague, Belgrade, Chisinau, Sarajevo and Podgorica.
LOT has also experimented with such services as Warsaw-Tashkent, Wroclaw-Seoul and Rzeszow-Milan.
It has sought to expand its fleet to support its network, and last year agreed to lease eight Boeing 737 Max jets for delivery over 2024-25. The airline says a compensation case over the 2019 grounding of other Max aircraft has yet to be concluded.
LOT recorded a 22% capacity hike in 2023 as well as a 25% rise in passenger numbers to 10 million.
It ended the year with 59 aircraft under operating lease, another eight under finance leases, and nine of its own.
Chief executive Michal Fijol states that the airline aims to increase this fleet of 76 aircraft to 86 by the end of 2024. He adds that its Boeing 787s will be refurbished with a cabin refit.
LOT’s latest strategic plan, covering 2024-28, features ambitions to expand the fleet to 110 aircraft by the end of the five-year period – when it will be transporting almost 17 million passengers – and broaden its network to include more than 20 new routes.
