By Martin M. Sobczyk
WARSAW--LOT Polish Airlines is planning to double its fleet and
the size of its operations by 2020, the airline's chief executive
said Monday, as Poland's once troubled national carrier aims to
become the dominant airline in Central Europe.
Chief Executive Sebastian Mikosz said at a press conference that
the carrier is looking at several options to raise equity for its
ambitious goal. This could include an initial public offering or
selling shares to strategic or private-equity investors, he
said.
Poland's Treasury Minister Andrzej Czerwinski, who has been in
his position for only a few days following a cabinet reshuffle,
said he fully backed the plan and said LOT needs to expand
significantly.
It's an unlikely change of course for the once-troubled airline.
Between 2012 and 2014 the airline received the equivalent of about
$144 million in emergency loans from the Polish government. This
brought it into conflict with the European Commission, who ordered
the airline to cut costs and restructure its operations.
The restructuring allowed LOT to record an operating profit of
99 million zlotys ($27 million) in 2014 after it cut a number of
unprofitable operations. Mr. Mikosz said the airline now has some
of the lowest operating costs among traditional carriers in
Europe.
After years of turmoil, Mr. Mikosz said LOT wants to increase
its domestic market share to 30% from 24% in 2014 and service 10
million passengers from 4.5 million last year. It also plans to
raise the number of destinations to 75-80, including 10-12
long-haul destinations, compared to 49 destinations in 2014.
Growth on this scale would mean LOT would reach the current size
of Austrian Airlines, Finnair Oyj (FNNNF) or Aer Lingus Group PLC
(EIL1.DB), he said.
"We want to be the leader of New Europe," he said. "The previous
period was difficult, defensive and reactive. We want to be
offensive and grow fast. We no longer want to play the role of an
ethnic carrier focused on Poles living abroad but to reach
further."
The Polish airline has worked for several years to attract more
transit passengers traveling through the Warsaw airport, which
services about 10 million people a year. LOT wants to operate
flights from Warsaw to Bangkok, Seoul and Tokyo in the next season
while continuing to service routes to the U.S., Canada and China.
It will also return to flying to some European destinations it had
to abandon during the restructuring.
He added that LOT will order more aircraft to service the
long-haul destinations and double its fleet to some 70-80 aircraft,
but he didn't elaborate on how the company will raise the funds to
pay for the expansion. LOT has no new aircraft currently on order,
but it will take delivery of two Boeing Co. (BA) 787 Dreamliner
jets, increasing the number of such aircraft in its fleet to
eight.
LOT could buy either Boeing's Dreamliner or Airbus Group SE's
(EADSY) A330neo planes, Mr. Mikosz said. Decisions on the new fleet
will be made this year, he added.
Write to Martin M. Sobczyk at martin.sobczyk@wsj.com
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