LOT Polish Airlines Receives Approval From the EC and Polish Government for PLN 2.9 Billion in Aid
The carrier received approval from the European Commission and the Council of Ministers of the Republic of Poland for an aid and loan package valued at PLN 2.9 billion (USD $784.5 million), consisting of a PLN 1.8 billion loan and a PLN 1.1 billion capital injection.
On Tuesday (December 22, 2020), LOT Polish Airlines announced that the European Commission and the Council of Ministers of the Republic of Poland have approved a financial aid package worth PLN 2.9 billion (USD $784.5 million). The aid consists of a PLN 1.8 billion (USD $486.9 million) loan and a PLN 1.1 billion (USD $297.6 million) capital injection. The carrier will use most of the aid to repay loans from the Polish Development Fund. In recent years, the carrier has optimized operations and reduced leasing costs, which has resulted in increased profitability and the number of passengers carried. The company plans on repaying the loan portion of the aid within six years through operating profits. In Tuesday’s announcement, LOT Polish Airlines’ CEO, Rafał Milczarski, said,
“The main cost of the airlines’ operations are the lease payments for aircraft, which are paid to foreign financial institutions. Due to the crisis, we have negotiated a significant reduction so that we can apply for state aid and then work out its repayment as soon as possible. The airline is a driver for the economy, tourism and a guarantee of the country's logistical security. Before the pandemic, we had been growing year on year in almost every category and generated record profits. We know how to get back on the path of intensive growth and we will do so.”
Prior to the pandemic, LOT was reporting profits every year. Since 2016, the carrier has doubled the size of their operations, expanded their fleet from 45 to 80 aircraft and launched 80 new routes. During 2019, the airline carried a record 10 million passengers and in 2020 planned to launch long-haul flights to Washington D.C. and San Francisco, and projected serving approximately 12 million guests. The airline is critically important to the Polish economy and according to the TOR report, contributes to the creation of nearly 64,000 jobs and around 0.56% to the national GDP or PLN 12 billion (USD $3.25 billion).
Source: LOT Polish Airlines