Government stalls cheap air fares
The nation will not rush to introduce an open-skies agreement that the EU is going to sign in two to three weeks with 14 countries, including Poland, radio station RMF FM reported.
The agreement will be valid one month after the ratification by the Council of Europe. This means that any airlines from the countries which signed the agreement would be able to fly to Poland.
But the nation will not immediately introduce the agreement since the government wants to protect the revenues of its national flagship airline LOT, said Andrzej Piłat, an undersecretary of state at the infrastructure ministry, adding that competition from discount operators would reduce LOT's revenues by about 20%.
EasyJet, for instance, has offered cheap flights between Prague and four cities in the UK, including London and Newcastle, for just €29 one-way since last October compared to Lufthansa's price round-trip of €240 from Warsaw to London or Czech Airlines' round-trip price of €398 from Prague to London.
Leszek Chorzewski, LOT's spokesman, dismissed €29 as a dumping price, arguing that the cost of fuel alone on such a connection is higher.
"The cheap airlines cannot hold prices like this forever," he said. "It is just a promotion. Second, as they grow, their costs will increase."
LOT did not comment on the fact that all the bargain airlines grew their revenues despite the impact of 911. Some have been operating for almost a decade.
In addition, Chorzewski pointed out that discount airlines fly to airports further out, such as Luton in the UK, which is 100 kilometres from London, and do not offer any meals onboard. Transportation costs to London and a meal added to the price of a ticket would make prices comparable to the fares offered by full-fare operators, he said. In fact, Luton is London's fourth-largest airport and has a high-speed rail link not only to the capital but to everywhere else in Britain.
"The foreign airlines had more time to prepare for 'open skies' than LOT," Chorzewski said. "Besides, their governments pumped billions of euros into their airlines, while LOT had to pay for everything from its profits."
The EU Commision dismissed the claim as a myth.
Chorzewski added that if the open-skies agreement came into force before the summer, it would hurt LOT's business.
"At the moment, we expect this agreement to be valid starting January 2004," he said. "We have everything planned for the summer season, and it is not easy to suddenly change our offers."
Furthermore, Chorzewski said that LOT was determined to take up the challenge and compete with other operators. LOT has already been cutting its costs - a policy that will continue. In February, LOT will announce its financial results for 2002, which are expected to be better than the results of most other airlines. Despite the continuing crisis in air transport worldwide, LOT increased its number of passengers in 2002 and reported a profit.
The agreement will be valid one month after the ratification by the Council of Europe. This means that any airlines from the countries which signed the agreement would be able to fly to Poland.
But the nation will not immediately introduce the agreement since the government wants to protect the revenues of its national flagship airline LOT, said Andrzej Piłat, an undersecretary of state at the infrastructure ministry, adding that competition from discount operators would reduce LOT's revenues by about 20%.
EasyJet, for instance, has offered cheap flights between Prague and four cities in the UK, including London and Newcastle, for just €29 one-way since last October compared to Lufthansa's price round-trip of €240 from Warsaw to London or Czech Airlines' round-trip price of €398 from Prague to London.
Leszek Chorzewski, LOT's spokesman, dismissed €29 as a dumping price, arguing that the cost of fuel alone on such a connection is higher.
"The cheap airlines cannot hold prices like this forever," he said. "It is just a promotion. Second, as they grow, their costs will increase."
LOT did not comment on the fact that all the bargain airlines grew their revenues despite the impact of 911. Some have been operating for almost a decade.
In addition, Chorzewski pointed out that discount airlines fly to airports further out, such as Luton in the UK, which is 100 kilometres from London, and do not offer any meals onboard. Transportation costs to London and a meal added to the price of a ticket would make prices comparable to the fares offered by full-fare operators, he said. In fact, Luton is London's fourth-largest airport and has a high-speed rail link not only to the capital but to everywhere else in Britain.
"The foreign airlines had more time to prepare for 'open skies' than LOT," Chorzewski said. "Besides, their governments pumped billions of euros into their airlines, while LOT had to pay for everything from its profits."
The EU Commision dismissed the claim as a myth.
Chorzewski added that if the open-skies agreement came into force before the summer, it would hurt LOT's business.
"At the moment, we expect this agreement to be valid starting January 2004," he said. "We have everything planned for the summer season, and it is not easy to suddenly change our offers."
Furthermore, Chorzewski said that LOT was determined to take up the challenge and compete with other operators. LOT has already been cutting its costs - a policy that will continue. In February, LOT will announce its financial results for 2002, which are expected to be better than the results of most other airlines. Despite the continuing crisis in air transport worldwide, LOT increased its number of passengers in 2002 and reported a profit.
