Clouds on the horizon?

Polish national air carrier Lot announced that it had posted a net profit of zł.539.8 million in 2006, nearly six times that of 2005. The profits came on the back of the sell-off of properties and stock in its portfolio, such as the Warsaw Marriott Hotel, shares in Bank Pekao and profits from fuel hedging.

Despite not earning a profit on its base operations, the company insists it is not in financial trouble. Lot's financial director, Piotr Ikanowicz, pointed out that the company maintains 2.5 million shares of Bank Pekao stock, which it is prepared to sell if the need arises. "The Polish air transport market is growing and we are going to fight for our share of it," Ikanowicz declared.

The news comes as a row between the company's shareholders heats up. On March 7, the Treasury Ministry submitted a bill to the Sejm that, if passed, would make it impossible for minority shareholders in companies to prevent majority shareholders from dictating management decisions. Currently, despite its majority stake, the Treasury's strategy can still be blocked by the two other minority shareholders - Swissair's receiver in bankruptcy and the firm's labor union.

However, the Ministry has already indefinitely suspended Lot's CEO and president, Marek Mazur, with the intention of dismissing him once the Sejm authorizes the amendment. The Ministry says that Mazur is incapable of the sort of heavy-duty insight required to revitalize the faltering airline.

In response, the labor union filed a motion with the Prime Minister's office to dismiss Deputy Treasury Minister Ireneusz Dàbrowski, who they say is responsible for all the recent changes. Dàbrowski insists that the Ministry's decisions were necessary to initialize the strategic development that would land Lot on the Warsaw Stock Exchange in 2008, which has long been the Ministry's goal.