Jet fuel furor

At the recent Central European Aviation Forum, air carriers called for the Polish government to promote competition, liberalization and deregulation in the Polish airline market. Among their specific complaints was the high cost of fuel at Polish airports, which airlines from across the continent blamed on a near monopoly by air-fuel provider Petrolot.

Pesky Petrolot
Petrolot belongs to PKN Orlen (which holds a 51-percent stake) and Lot (49 percent) and currently it operates without competition in all but three Polish airports: Wrocław and Zielona Góra (which are supplied by Lotos) and Rzeszów (which is supplied by Orlen).

Petrolot's domination of the market is common knowledge, and even the Deputy Minister of Transport and Construction Eugeniusz Wróbel says the prices set by Petrolot are burdensome. "It is not a secret that Lot fills its tanks elsewhere if it can," he says.

However, Petrolot claims it is open to other suppliers. "Healthy competition is always necessary," says Hanna Pyszkiewicz, a spokesperson for Petrolot. "If another company enters the market, they can do it. We are in a free country. However, this needs investment, because it's not as if the company just comes and sells fuel, they also need to construct the infrastructure."

The Ministry says one part of the regulations to increase competition has already been prepared and another part is being worked on. "We hope that the new law will come out in the second half of the year," says Wróbel.

Ready and willing
According to Krzysztof Kapis, former president of the Civil Aviation Office (ULC) and current president of Lot, there is no monopoly from a legal perspective because the law allows other suppliers to operate at the airports, and the ULC is ready and willing to license new suppliers.

"The conditions of the tenders are currently being worked on by PPL [Polish Airports]. The process might be taking too long but I think that [its effects will be seen in] the not-too-distant future," says Kapis. PPL's spokesperson, Artur Burak, says that procedures are complicated and that the tender may take an additional couple of months or even longer.

Half empty
Krzysztof Pawłowski, president of Poznań Airport, is less than optimistic. His airport is in talks with new suppliers and new companies are still welcome - but there are significant obstacles. "There is the huge insurance liability for this sort of activity which according to the draft of the Polish law will amount to XDR280 [zł.1,279] million. Even now companies are not able to sell the fuel cheaper because of the insurance," says Pawłowski.

Difficult as the situation may be it doesn't discourage Kapis. "This is not an overnight process," he says. That may not be enough to satisfy the industry heavyweights, such as Easyjet's director for Germany, Denmark, and Eastern Europe, John Kohlsaat. "This is a process that is starting now - but it definitely needs more speed," he says.