LOT's restructuring pays off, 2002 profit to surge

Polish Airlines LOT, which has just signed a cooperation agreement with Lufthansa intends to replace 15 planes, enter the Star Alliance and launch new connections. LOT president Jan Litwinski believes that this now means that a strategic sector investor is no longer needed. "We have decided to replace our old ATR 42-300 for ATR 42-500, and have already taken delivery of the first one. We also hope to decide by the end of the year who will supply us with at least ten new 70-seat planes. Following the bankruptcy of Fairchild Dornier, we will choose between the offers of Bombardier and Embraer," Litwinski said, "The prognosis for 2002 will be much better than expected which shows our restructuring is working. We have closed 11 unprofitable connections, a number of flights on unprofitable routes and reduced staff levels by 600, which is 15% of our workforce." After eight months LOT has reduced its costs by an impressive 12%, while revenues rose 3%. "We had forecast this year's profit at zl. 28 million but today I feel safe to say that it will exceed zl. 60 million," Litwinski said. (Puls Biznesu, pp. 6, 7) A.Z.