Poland selling troubled LOT airline

WARSAW (AFP) - Poland moved Tuesday towards privatizing its national airline LOT as the government proposed legislation that would allow for the sale of a majority stake in the cash-strapped carrier.

"There is no doubt that if we don't want to keep funnelling public funds into this bottomless pit, privatization remains the only realistic option," Prime Minister Donald Tusk told a press conference in Warsaw.

LOT ended 2012 with an operating loss of 115 million zloty (28 million euros,$36 million), instead of a forecast profit of 52.5 million zloty.

In December, it received the first slice of a billion-zloty rescue package, prompting the European Union to determine whether Warsaw broke subsidy rules when it threw LOT a lifeline.

The airline last month sent government officials a restructuring plan that must be presented to the European Commission for approval.

The troubled company had pegged its hopes on the Boeing 787 Dreamliner - becoming the first in Europe to use the plane - but the plan was thwarted when Dreamliners were grounded in January because of battery problems.

LOT had ordered eight Dreamliners to update its fleet of 35 planes, but the two it has already received are expected to remain grounded until October.

Poland owns 67.97 percent of the airline, which employed 2,063 people at the end of last year.

The national treasury has been required until now to maintain at least a 51 percent stake in the carrier, which announced in February that it would axe 500 jobs, or a quarter of its total workforce.

"Now, when buying the firm, an investor will be able to decide its future on their own," Treasury Minister Mikolaj Budzanowski said in a statement.

He added that the government wants LOT to maintain its brand and its hub in Warsaw, where the airline accounts for 45 percent of passenger traffic.

Under European regulations, Poland can allow non-European companies to acquire only minority stakes in strategic companies like airlines.

LOT was sold to Swissair in 1999, but the company went bust and Poland re-acquired the shares.

Editor’s note:Yahoo Philippines encourages responsible comments that add dimension to the discussion. No bashing or hate speech, please. You can express your opinion without slamming others or making derogatory remarks.

  • What can void a new car warranty? James Deakin - Wheel Power
    What can void a new car warranty?

    "I was denied warranty once for changing my horn!" One very annoyed reader wrote. "I was told that placing a backup camera will void my warranty" said another. The others are best left in my private inbox as Yahoo! have a swear jar in the office that I do not feel like donating this week's pay to. Continue reading → …

  • Docu exposes destruction of PH marine resources VERA Files - The Inbox
    Docu exposes destruction of PH marine resources

    By Kiersnerr Gerwin B. Tacadena, VERA Files “Gutom (hunger),” Sen. Loren Legarda said is what’s in store for the Filipino people if destruction of the country's marine resources is not stopped. Legarda, chair of the Senate committee on Environment and Natural … Continue reading → …

  • ‘Yolanda’ fiberglass boats modern-day Noah’s ark VERA Files - The Inbox
    ‘Yolanda’ fiberglass boats modern-day Noah’s ark

    By Jane Dasal, VERA Files If you want to save the earth, build a boat. That's what a group of environmentalists is saying, especially if you want to save both the forests and fishermen affected by supertyphoon “Yolanda” (Haiyan). “Haiyan … Continue reading → …

POLL
Loading...
Poll Choice Options