Flynatic.com > LOT is now in the black
2014-09-04 LOT is now in the blackLOT Polish Airlines consistently improve their financial standing. After 8 months of this year, the airline is now in the black, meaning the positive result on the core business has been achieved.
This is in line with the assumptions of the Restructuring Plan.
LOT effectively seeks to achieve sustainable profitability. At the end of August, the airline exceeded the cumulative break even point. This means that, following years of loss, the company is making profits on its core business which is flying.
"Compared to the corresponding period of 2013, we have attained the result which is ca. PLN 100M better. We consistently pursue our goals and meet our annual financial forecast. According to the Restructuring Plan, approved by the European Commission, in 2014 we are expected to achieve the return on ordinary activities of more or less PLN 70M. The company makes tremendous efforts on its way to effective restructuring. The improvement of our effectiveness is marked in all aspects of our operations, which is appreciated by both our passengers, and partners in business. Reaching the break even point is the exclusive success of the company?s activities. There are no market-specific factors, such as aviation fuel prices or currency exchange rates, that would help us in it, as it was partially the case in the last year." - says Sebastian Mikosz, CEO, LOT Polish Airlines.
It was already in 2013 when LOT improved its financial results. The last year was closed with a slight loss on the core business, of PLN 4M only. The result was still by PLN 138M better than assumed in the Restructuring Plan. 2013 was also the first year of many in which LOT recorded a net profit. It amounted to PLN 26M.
As the situation is still improving, LOT continues to finance the difficult restructuring process exclusively with its own resources. At least by the end of September, the Airline will not apply for the second tranche of public aid, although it should have done so in August of last year. It is also known that the amount of the second tranche will be finally smaller than assumed.
LOT owes its positive results to continuous transitions. The carrier continues to improve the quality of services, launches new products, expands its portfolio and approaches new passenger groups. For example, the new LOT Economy Simple tariff was recently added for European flights for those for whom the ticket price is crucial. It allows even 30% cheaper flights. On the other hand, LOT has launched the new LOT Economy Plus class. This solution is addressed to those for whom quality is the priority. The business class service is still being improved too.
Also the new philosophy of creating a map of routes, which was introduced this summer, begins to pay off. LOT has increased its transit capacities by as much as over 40%. It means that passengers travelling via Warsaw will be able to change more comfortably on their way to other cities in Poland and destinations in the Central and Eastern Europe. The carrier continues this direction of changes by introducing a flight schedule for the upcoming winter season. Such options are among the reasons why LOT becomes the airline of choice for a growing number of passengers from both Poland and the entire region.
2014 is also the first year in which the "Dreamliner's effect" fully works. Last year, LOT partially used the legacy fleet. The first Boeing 787 jets started to fly in June, and all long-haul flights have been operated with Dreamliners only from August. Since the beginning of this year, only those state-of-the-art aircrafts make the long-distance fleet. They are popular among the passengers but also bring tangible benefits, such as fuel savings and the like. LOT owns currently six Dreamliners which are used on the regular route map and, according to the Restructuring Plan, they are also hired to other airlines. In winter, the aircrafts will also operate charter flights for two largest tour operators in Poland.
At the end of this July, the European Commission made a positive decision about LOT. The Restructuring Plan was approved and the public aid was lawfully granted. The restructuring process of the company will formally end at the end of 2015. Until that time, LOT may not open new connections. However, the first (especially long-haul) new flights are due to be announced at the beginning of the next year. At present, details of the new company policy are being worked on.