Polish flag carrier LOT will reveal new routes in June or July as it prepares to return to growth for the first time since being forced to cap its operations as a compensatory measure for securing state aid.
The Star Alliance carrier has been undergoing formal restructuring in connection with being cleared for Zl804 million ($260 million) in state funding, approved under the European Commission's "one time, last time" principle. This prevents any further state support over the next 10 years and also imposed restrictions on the airline's activities during the course of the restructuring plan, forcing LOT to drop a number of routes.
The restructuring period will finish in December and the airline – which returned to profit in 2014, before one-off currency effects – is now turning its attentions to growth.
"It's only six-and-a-half months away," an eager Sebastian Mikosz – LOT's chief executive – told Flightglobal during an interview in Warsaw yesterday. "We have improved in 2013, we had profit of €25 million in 2014, so now what's next? The most challenging thing is continuing this project, but having a different tempo: a tempo of a company that is not struggling for survival, but fighting to develop."
The restrictions imposed by European regulators mean LOT has not been able to operate its fleet at full utilisation during this period. For example, one of its five Boeing 787s has been out on lease with Air Europa.
"When you end up restructuring with these compensatory measures, you have assets in your hand that are underutilised. So the goal is to make better use of what you have before starting massive investment," says Mikosz. "We will announce new routes in June and July. We will add progressively to the network, targeting much better utilisation of our assets – that's what we are going to focus on.
"The first wave will be on frequencies. We will add some routes in Europe – we are thinking of going back on some routes we used to fly," he says. The carrier was forced to drop routes, such as Warsaw connections to Athens, Barcelona, Nice and Zurich, to comply with the capacity restrictions imposed during the restructuring.
"Coming back to these routes is one of the most natural things," he says, though he acknowledges that LOT will have ground to make up. "The market is never staying empty, so we are going to have to fight back."
The carrier is also set to add two or three long-haul destinations for next summer and more destinations ahead as its Boeing 787 fleet grows from the four units in service with LOT today to eight by early 2017.
"We are looking at long-haul routes, and our very much preferred destinations are Asian cities, as well as adding capacity in Beijing," he says. The Chinese capital is its only Asian destination, which it serve thrice weekly. "We are working on increasing the frequency. Then we have a list of destinations in Asia we are analysing. There are roughly 10 destinations; we will launch two or three next year."
Source: Cirium Dashboard
