SAiRGroup president steps down; LOT looks to IPO
How LOT Polish Airlines will be affected by last week's management shakeup at LOT owner SAiRGroup, remains to be seen, sources familiar with the matter said.
Last Tuesday, Philippe Bruggisser stepped down as head of SAiRGroup, a collection of 11 companies headed by Swissair. "He was forced to resign because he was associated with old strategies," said Erbin Schearer, spokesman for SAiRGroup. "The acquisition of smaller, often unprofitable, European airlines will be replaced by a 'new strategic orientation.'" This means that "SAiRGroup will not expand any further," he said, adding that details would not be revealed until mid-March. "Every participating airline will be studied and reevaluated," Schearer said. At the end of 1999, SAiRGroup bought a 36.7% stake in LOT for $180 million.
Despite the uncertainty surrounding the airline's parent company last week, LOT was adamant that it would be ready for its initial public offering (IPO) in 2002 or 2003. "LOT is interested in being launched on the WSE quickly," said Leszek Chorzewski, press spokesman for LOT.
LOT needs a capital injection quickly to boost its finances before 2004, when Poland's air restrictions are lifted. "The capital would strengthen LOT's position before airlines are allowed to act freely in Poland," said Jan Szczesny, deputy director for strategic firms at the Treasury Ministry.
According to Chorzewski, however, although the IPO itself looks imminent, the ministry is now analyzing LOT's finances before setting a final date. "If the (airline's) financial output for 2000 establishes the company as being stable, LOT will be listed on the stock exchange," Szczesny said. "LOT can't be a high-risk company. Nobody will buy it because of patriotism."
The airline's financial results for 2000 have yet to be released.
Of the $150 million received from SAiRGroup, LOT has upgraded its fleet and expanded its network of connections from 800 to 2,300 transit flights weekly. According to Chorzewski, last year's investments were only the beginning of the restructuring process. LOT is planning to invest zl. 1 billion ($244 million) to develop its Warsaw hub, he said.
Last year also saw the airline adapting its corporate identity to SAiRGroup standards, as well as unifying its service and connection network to conform to the needs of the Qualiflyer Group, which LOT entered when it was acquired by SAiRGroup.
According to Chorzewski, these changes will force the expansion of Okecie airport. "Okecie will begin to jam up," he said. With expansion plans already in the works, the new terminal is scheduled for completion in 2004.
