By Marcin Sobczyk
WARSAW--After years of heavy losses that pushed it to the brink
of bankruptcy, state-owned carrier LOT Polish Airlines swung to a
symbolic net profit in 2013, saying Wednesday it boosted passenger
numbers and saved fuel by using Boeing Co.'s (BA) 787 Dreamliner
jets.
LOT made 26 million zlotys ($8.6 million) compared to a loss of
nearly PLN200 million it had projected for the year in a
restructuring program sent to the European Commission. The company
is on the radar of the European Union executive after tapping
PLN400 million in a government loan in 2012 that saved it from
insolvency.
The Commission has said it's checking if the loan complies with
the EU's competition laws. The airline has already had to shrink
its business as a way of remedying the distortion the state aid has
caused to market competition.
Brussels may yet rule if the aid violated rules. The airline
said Wednesday that the signs it's receiving from the European
Commission are encouraging.
The net profit figure includes an undisclosed amount of
compensation LOT last year negotiated with Boeing for the global
grounding of the Dreamliner jets in early 2013 after battery
malfunctions on some aircraft.
On the operating level, without the compensation, LOT generated
a small loss of PLN4 million compared to a loss of PLN142 million
it had projected.
LOT has been close to bankruptcy several times over the past
decade due to high fuel costs, fierce competition in Europe and
failed fuel hedging bets. LOT said it may yet tap more government
funds this year, but will likely generate PLN70 million in
operating profits.
LOT will struggle to utilize the sixth Dreamliner jet it will
soon receive because it can't open new routes as a result of the
ongoing restructuring, it said.
If Brussels clears the government aid LOT has received,
restrictions on growth initiatives will end in October 2015. The
Polish government has talked to a number of possible investors in
the airline, so far to no avail. Talks with a potential strategic
buyer will continue this year, LOT said.
Write to Marcin Sobczyk at marcin.sobczyk@wsj.com
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