LOT brand image already 'private'
An unprecedented international advertising campaign will be at the forefront of the new strategy to overhaul its fleet and reduce prices. The aim is to have secured a new market by the time of its IPO on the Warsaw bourse, the date of which is as yet tantalizingly unknown.
Last month, the outgoing head of its supervisory board, Prime Minister Marek Belka, announced that the highest priority for the company should be to find new capital. While the record-high oil prices and emerging competition from low-cost carriers hardly make for favorable conditions for an incumbent in search of extra funds, the company continues to enjoy a clear advantage over its private-sector competitors due to investors' perception of security conferred by the availability of a government bail-out in case it encounters turbulence.
Nevertheless, an IPO is the suggested solution for raising new capital, but only after LOT's balance sheet improves. Other European flag carriers, such as SAS and Air France, are said to be in too much financial difficulty themselves to represent major investment potential.
"The campaign aims at building the brand of LOT Polish Airlines, a Star Alliance member, as a hospitable and friendly airline that offers convenient connections and timetables, as well as a friendly and professional service," say Gruppa66 Ogilvy, the firm behind the advertising campaign.
The LOT brand currently has a varied level of penetration across Europe, and the marketing campaign has taken this into consideration. There is currently a high level of brand awareness in Ukraine and Russia, while there is a good level of positive association in the UK and Italy. Hungary, Denmark and Switzerland are key growth areas for the LOT brand as the Polish carrier is virtually unknown in those countries.
Piotr Kabala, PR director at Gruppa66 Ogilvy, says that LOT should not be perceived as a state-owned company. "Although LOT has yet to privatize, nobody who runs this marketing campaign would say that LOT is a state-owned company," he says. "Its product, its prices and its services are competitive." Kabala argues that, thanks to its membership of the Star Alliance, part of the job of raising and improving LOT's brand awareness has already been achieved.
"The IPO climate in Warsaw is excellent," says Tomasz Bardziłowski, head of Equity Research in Warsaw. "But LOT must wait. The air industry is going through a lot of change after EU membership. There are many new competitors, untested markets, and domestic and global fuel prices are creating uncertainty."
Bardziłowski suggests that LOT should see what its position is in the market in two years time, when the air industry has hopefully stabilized.
Last month, the outgoing head of its supervisory board, Prime Minister Marek Belka, announced that the highest priority for the company should be to find new capital. While the record-high oil prices and emerging competition from low-cost carriers hardly make for favorable conditions for an incumbent in search of extra funds, the company continues to enjoy a clear advantage over its private-sector competitors due to investors' perception of security conferred by the availability of a government bail-out in case it encounters turbulence.
Nevertheless, an IPO is the suggested solution for raising new capital, but only after LOT's balance sheet improves. Other European flag carriers, such as SAS and Air France, are said to be in too much financial difficulty themselves to represent major investment potential.
"The campaign aims at building the brand of LOT Polish Airlines, a Star Alliance member, as a hospitable and friendly airline that offers convenient connections and timetables, as well as a friendly and professional service," say Gruppa66 Ogilvy, the firm behind the advertising campaign.
The LOT brand currently has a varied level of penetration across Europe, and the marketing campaign has taken this into consideration. There is currently a high level of brand awareness in Ukraine and Russia, while there is a good level of positive association in the UK and Italy. Hungary, Denmark and Switzerland are key growth areas for the LOT brand as the Polish carrier is virtually unknown in those countries.
Piotr Kabala, PR director at Gruppa66 Ogilvy, says that LOT should not be perceived as a state-owned company. "Although LOT has yet to privatize, nobody who runs this marketing campaign would say that LOT is a state-owned company," he says. "Its product, its prices and its services are competitive." Kabala argues that, thanks to its membership of the Star Alliance, part of the job of raising and improving LOT's brand awareness has already been achieved.
"The IPO climate in Warsaw is excellent," says Tomasz Bardziłowski, head of Equity Research in Warsaw. "But LOT must wait. The air industry is going through a lot of change after EU membership. There are many new competitors, untested markets, and domestic and global fuel prices are creating uncertainty."
Bardziłowski suggests that LOT should see what its position is in the market in two years time, when the air industry has hopefully stabilized.
