More shake-ups for LOT
The search for a new investor for ailing national air carrier LOT Polish Airlines could be seriously hampered by recent revelations that its management board members received €678,000 for consultancy services from SAirGroup, owner of Swissair, in violation of their employment contracts.
As a result, the treasury ministry recalled the three remaining members of LOT's management board last week, saying that they had no right to receive the additional payments. LOT president Jan Litwiński resigned in mid-March over allegations that he received money from Swissair for advisory services.
Analysts said that the management dismissals would now seriously impede LOT's efforts to find an investor, a situation which has been complicated by decreased passenger numbers and high fuel prices in light of global political and economic crises.
"We shouldn't have expected that an alliance with a partner who in a dubious way expands his firm at the expense of smaller airlines would turn out any better," said Elżbieta Marciszewska, an airline industry analyst from the Warsaw School of Economics, referring to Swissair.
Following the Swiss carrier's bankruptcy in late 2001, the 25.1% stake it held in LOT fell under the control of an official receiver. Although the former owner said it would like to sell its stake, no-one has as yet expressed an interest in buying it. LOT has long suffered from misdirected restructuring decisions and unnecessary investments.
Analysts believe that Swissair may seek a financial institution as last resort to get rid of the stake.
"There is the option of selling the Swissair stake to a financial institution, especially since in difficult times they serve as buffers that help to sit out a slump," said one analyst. "But eventually someone will have to buy the stake from the institutional investor."
Lufthansa, LOT's partner in the Star Alliance, may also be less than willing to offer a helping hand.
"This is a bad time for companies such as Lufthansa to plan any new investments," Marciszewska said. "It's also a really bad time to be searching for an investor."
With the current situation in Iraq forcing up oil prices on the international market, experts said that the only solution for LOT is to sit the trouble out. But there are fears that as the situation clears up, LOT's survival may be threatened as it could face more competition from smaller domestic airlines than it had initially anticipated.
As a result, the treasury ministry recalled the three remaining members of LOT's management board last week, saying that they had no right to receive the additional payments. LOT president Jan Litwiński resigned in mid-March over allegations that he received money from Swissair for advisory services.
Analysts said that the management dismissals would now seriously impede LOT's efforts to find an investor, a situation which has been complicated by decreased passenger numbers and high fuel prices in light of global political and economic crises.
"We shouldn't have expected that an alliance with a partner who in a dubious way expands his firm at the expense of smaller airlines would turn out any better," said Elżbieta Marciszewska, an airline industry analyst from the Warsaw School of Economics, referring to Swissair.
Following the Swiss carrier's bankruptcy in late 2001, the 25.1% stake it held in LOT fell under the control of an official receiver. Although the former owner said it would like to sell its stake, no-one has as yet expressed an interest in buying it. LOT has long suffered from misdirected restructuring decisions and unnecessary investments.
Analysts believe that Swissair may seek a financial institution as last resort to get rid of the stake.
"There is the option of selling the Swissair stake to a financial institution, especially since in difficult times they serve as buffers that help to sit out a slump," said one analyst. "But eventually someone will have to buy the stake from the institutional investor."
Lufthansa, LOT's partner in the Star Alliance, may also be less than willing to offer a helping hand.
"This is a bad time for companies such as Lufthansa to plan any new investments," Marciszewska said. "It's also a really bad time to be searching for an investor."
With the current situation in Iraq forcing up oil prices on the international market, experts said that the only solution for LOT is to sit the trouble out. But there are fears that as the situation clears up, LOT's survival may be threatened as it could face more competition from smaller domestic airlines than it had initially anticipated.
