Tag Archives: LOT Polish Airlines

LOT Polish Airlines wants to double in size in the next 5 years

LOT Polish Airways (Warsaw) has big plans. The carrier wants to double in size in the next five years.

The airline last week announced it would add long-haul routes to Bangkok, Seoul and Tokyo. LOT will also launch more than a dozen European connections, thus expanding its hub and providing convenient transfer flights to passengers from such cities as Ljubljana, Zurich, Cluj-Napoca and Nice.

The first long-haul route to be launched will be Tokyo – it will also be the first direct connection from Poland and New Europe to Japan. The first flight is scheduled for  January 13, 2016 as previously report. The next connections – to Bangkok and Seoul – will start in autumn 2016.

The carrier is also starting routes between January and March 2016. LOT Polish will operate the Warsaw – Dusseldorf route starting on January 1, 2016 with two daily Embraer 175 flights.

Warsaw – Zurich will be started on January 1, 2016 with two daily Embraer 170 flights.

The following day the Warsaw – Barcelona route will commence with four weekly Embraer 195 flights.

Additionally the carrier will restart Warsaw – Cluj (January 2, 2016), Warsaw – Venice (January 23, 2016), Warsaw – Athens (March 2, 2016), Warsaw – Ljubljana (March 2, 2016), Warsaw – Beirut (March 30, 2016) and Warsaw – Nice (March 30, 2016).

The airline outlined its plans as it hosted the Star Alliance meeting:

In next five years LOT plans to be twice as big an airline as it is now. Wants to carry 10 million passengers a year, which is more than twice as much as now. LOT plans to have also almost twice as big a fleet as currently and 60% more operations. The company has presented its strategic objectives and development plans for 2016-2020. It has announced opening five new long-haul connections next year. Three new connections to Asia – Tokyo, Seoul and Bangkok and more than dozen European connections have just been announced. Other new routes will be known this autumn. This is the first such dynamic growth in the company’s history. LOT intends to compete for leadership in the region, becoming the largest network carrier in New Europe.

LOT wants to connect New Europe with the world and become the most international Polish brand. Instead of defending the position of an ethnic carrier in its market, LOT wants to start competing actively for market share in Europe.

We have all the assets to become a regional leader. We already have a strong position in relation to other network carriers in New Europe and access to the largest regional market, which will grow intensively. Our Warsaw hub is perfectly located, efficient and is the largest one in this part of Europe. We are successfully ending our restructuring process, historically we are already the main airline flying from this region to North America, and the 86-year history translates into a relatively high brand recognition. These are just a few arguments that back our position” – says Sebastian Mikosz, CEO of LOT Polish Airlines. Development is the company’s goal and task is to take advantage of the market potential and the projected growth. “This is a perfect moment for us. The population of the New Europe region is more than 175 million people. Its economic growth rate is more than four times higher than in the Euro zone countries. The number of passengers per one inhabitant is growing much faster than in countries of Old Europe, and at the time it is still five times lower than in the EUexplains Sebastian Mikosz.

LOT’s strategic objectives are based on five key elements. The first one are long-haul flights, which the company intends to develop consistently. Even now routes operated by the Dreamliner are the most profitable part of the business, and LOT is the only airline that flies, on a larger scale, convenient, on regular connections from New Europe to the USA, Canada, and China. “This will be a driving force of our growth, which will entail the rest of the network. In the long-haul flights area we have the lowest competition in the region. We have one of the youngest fleets in Europe and we are the only airline to operate all its long-haul connections with the most advanced aircraft in the world, the Boeing 787 Dreamliner. Not only Polish passengers appreciate this fact” – assures Sebastian Mikosz.

The second element is the Warsaw hub. LOT will be a hub & spoke carrier, consistently developing its offer of quick and convenient connections via Warsaw. “We have already increased our transfer capabilities by 40%. Together with the Chopin Airport we have a potential to consolidate fragmented markets of New Europe and to provide it with a leading transfer hub for intercontinental connection” – assumes LOT’s CEO. Convenient geographical location is not the main advantage. The most important argument for passengers is the minimum connecting time – 35-45 minutes, which is one of the shortest in Europe. It is supported by modern, spacious terminal, proximity to major Warsaw business and office centres and to the city centre. All of this comes with the airport’s potential of servicing more than 20 million passengers per year (currently 10 million).

The third element is growth. In 2020 LOT wants to carry more than 10 million passengers a year, that is more than twice as many as today, to perform more than one hundred thousand operations per year (currently over 68,000) and to fly to around 75-80 destinations (currently 49). It intends to regain the lost market share in Poland approximately to the level of 30% and get close to 10% market share in New Europe. This should result in an increase in revenues to about PLN 9 billion (currently less than PLN 3.5 billion) with constantly improving margins, which already puts LOT above average among European network carriers.

“We need to focus on building the effect of scale. Insufficient scale of operations is currently LOT’s biggest problem. There is absolutely no reason why in five years’ time we should not become an airline of a size comparable to Austrian Airlines, Finnair, TAP or Air Lingus. We operate in a fast growing market and, without development, our market share will be rapidly declining. Without expanding the network we will be very susceptible to pressure from the competitionexplains LOT’s CEO. Apart from competition it is a question of company’s performance and its role in the industry. “Only with real potential to consolidate the regional market LOT may become an attractive partner for wider cooperation within alliances or joint ventures. Development is also crucial in the context of potential privatization, for which LOT is getting readysays Sebastian Mikosz.

The value chain is the fourth extremely important element. “In our industry customer satisfaction consists of many elements, which are being performed by our partners or sub-contractors and not the airline alone. The airport and relevant services are responsible for airport procedures, and the handling agent (also a separate entity) is responsible for check-in, collection of luggage and its transport to the aircraft and then to the conveyor belt. We want to cooperate and monitor the entire chain more closely. We expect that our suppliers will develop together with us and also raise the level of quality of their services. Only by doing so we can ensure LOT’s development in passenger services” – explains Ewa Kołowiecka, Chief Operations Officer.

The fifth key element is a committed team. “LOT also means a lot of people for whom this is not just a job but primarily a passion. But we have to continue changing as an organization – this process is already under way but we need a substantial transformation of our corporate culture. We are determined to build a coherent system of staff development to ensure that LOT will become a modern and dynamically growing airline” – adds Monika Kiełtyka-Michna, Member of the Management Board responsible for Corporate Matters.

Presenting its main strategic objectives, LOT also presented the network development plans. Carrier announced  opening five new long-haul connections in 2016. Three of them – Tokyo, Bangkok and Seoul have just been announced. Others will be announced this autumn. After opening five new destinations LOT will more than double its network of long-haul connections compared to the present one as soon as next year. As regards new European connections, three new short-haul routes have already appeared in the booking systems: Venice, Cluj-Napoca and Ljubljana. LOT is also coming back to some routes, which it had to suspend as part of the final pool of compensatory measures required by the European Commission in return for the state aid. These are Athens, Barcelona, Nice, Zurich and Beirut. Starting from January 2016 flights to Belgrade, Düsseldorf, Yerevan, Chisinau, Zagreb and Gdansk – Cracow, which were suspended since July of this year as part of the final pool of compensatory measures required by the European Commission, will be restored as well.

LOT emphasizes that it is able to implement the first phase of the development of the connections network entirely by using its present fleet. New fleet will be needed in subsequent phases. We want to have at least 70-80 new aircrafts by 2020. “Of course, further intensive development will require more resources. For this purpose the company must acquire an investor. This is the best time to do it. The financial situation is stable. LOT is on the final stretch to a successful closure of the restructuring process. For the first time in seven years, LOT ended the preceding year with a profit on core business, that is flying, amounting to more than 99 million zloty” – emphasizes Maciej Dziudzik, Member of the Management Board responsible for Financial Matters.

Thanks to an attractive schedule and high customer service standards LOT wants to make travel for a wide range of customers, even those most demanding ones, as pleasant as possible. With a rich range of classes, fares, products and additional services we want to enable passengers to freely compose their travel of the individually chosen elements. “On one hand, we are already constantly improving our complex offer for demanding business passengers, while, on the other hand, we are creating new travel opportunities for persons for whom low price is crucial. We are changing and improving our quality throughout the process of the so-called customer journey. We want to accompany our passengers and be the host of their journey right from the thought about it, then by seeking an attractive offer, sales and distribution, services before the flight, on-board product and services after the flight. We intend, for example, to further develop mobile applications and our own on-line sales channels to make it easier for customers to use our services, to introduce tools that allow for personalized offers and promotions, and to systematically monitor the level of customer satisfaction. At the turn of the year we plan to refresh the interior of Boeing 737 and to gradually introduce in all Boeing planes, including Dreamliners, elements of new design and new colour scheme for each class of travel. As a result, the aircraft interiors will look more modern and friendly. New colours and markings will significantly improve travel, helping passengers find their way at the airport, go through it and take a comfortable seat on the plane. We want to be a consciously chosen carrier of the region – summarizes Marcin Celejewski, Member of the Management Board responsible for Trade Issues.

Presenting its strategic objectives and development plans, LOT presented its re-defined mission: “We are proud to connect New Europe with the World. We take care of our passengers, being full of positive energy, mindful of Polish tradition and hospitality. Thanks to the passion and professionalism of the whole team we are developing, creating a profitable airline. Together we are building the most international Polish brand.”

Copyright Photo: SPA/AirlinersGallery.com. The Embraer E-Jets will lead the expansion on the European routes. LOT Polish Airlines Embraer ERJ 190-200LR (ERJ 195) SP-LNA (msn 19000415)  departs from London (Heathrow).

LOT Polish aircraft slide show: AG Airline Slide Show

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LOT Polish Airlines to launch flights to Tokyo, will restore four routes

LOT Polish Airlines (Warsaw) has announced it will launch nonstop Boeing 787-8 Dreamliner flights from Warsaw to Tokyo (Narita) starting on January 13, 2016. The new route will operate three days a week.

In other news, according to Airline Route, the carrier will restore four routes to Belgrade, Chisinau, Yerevan and Zagreb in early January. These four routes were due to be dropped on July 1.

Copyright Photo: TMK Photography/AirlinersGallery.com. Boeing 787-8 Dreamliner SP-LRC (msn 35940) arrives in Toronto (Pearson).

LOT Polish Airlines aircraft slide show: AG Airline Slide Show

Photo below: LOT Polish Airlines. The economy cabin of the Boeing 787-8.

LOT Polish 787-8 Economy Cabin (LOT)(LR)

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LOT Polish Airlines produces its first profit in seven years

LOT Polish Airlines (Warsaw) is back in the black, producing its first profit in seven years. The airline issued this statement:

LOT ended 2014 in the black. With more than PLN 99 million ($26 million) profit on its core business of flying, LOT earned 40 percent more than it planned. This is the company’s first profit in seven years.

LOT was supposed to end 2014 with PLN 70 million ($19 million) profit on its core business but it is almost 30 million ($8 million) above the Restructuring Plan assumptions and 103 million ($27 million) more than in 2013.

“The company is steadily improving its situation, stabilizing its financial condition and getting ready for rapid growth in the next year,” said Sebastian Mikosz, CEO, LOT Polish Airlines. “The positive result on the core business, which is a key indicator of our company’s health, is of utmost importance since it has been achieved regardless of the compensation measures required by the European Commission.”

“Because of the public aid received, we had to cut the number of flights by almost eight percent in 2014, compared to the previous year. Nevertheless, we carried two percent more passengers and increased the revenue in comparison with 2013, while keeping a similar cost level,” continued Mikosz.

The company owes its positive results to consistent changes and initiatives included in the Restructuring Plan. Most of them were added as early as in 2013, but 2014 was the first full year to have seen the results. LOT continues to modernize and expand its sales channels, including mobile solutions. The quality of service is gradually improving. New products are being added to address new passenger groups in the market.

The new philosophy of building a network has also paid off. LOT has increased its connecting capacities by as much as over 40 percent in its Warsaw hub. Such connecting options are among the reasons why LOT has become the first choice for a constantly growing number of passengers from Poland as well as the entire Eastern and Central Europe region.

2014 was also the first year to have seen the Dreamliner effect since it was only in the entire past year that all long-haul flights were operated exclusively with these aircraft. The Boeing 787 Dreamliner is not only popular among passengers but provides tangible benefits, such as fuel savings. LOT currently operates six Dreamliners on its schedule network, leases them to other airlines and operates long-haul charter flights in the winter season. An efficient use of the Dreamliner fleet is included in the Restructuring Plan.

“The results in 2014 show we can operate effectively in this very competitive market, and there is a place for such a carrier as LOT,” added Mikosz. “However, we have to remember that this is just the first step of transformation and more challenges are ahead. This year, we are bound to repeat the financial success, as it is our goal to achieve sustained profitability and to move from restructuring to a rapid growth of the company.”

LOT has also improved other indicators. The EBITDA — indicator of company performance which determines the cash flow generating ability — also improved. EBITDA in 2014, is PLN 291 million ($77 million), compared to 2013 PLN 156 million ($41 million) and 2012 a minus PLN 346 million ($91 million).

The normalized net profit, i.e. without one-offs and accounting effects, is also positive and amounts nearly to PLN 36 million ($9.5 million). Taking into account the one-offs and accounting effects, related to the increase of currency exchanging rates (mainly of the dollar), a minus appears at the net result at the level of 263.4 million ($70 million). This is only an artificial accounting record having no effect on the actual financial health of the company. It is because the relationship between LOT’s earnings and spending in foreign currencies is fairly in balance. Therefore, no currency is in fact exchanged, but only the amounts are booked in PLN according to the valid standards. The net profit in the previous year amounted to PLN 26 million ($7 million). The normalized net profit in 2013 was a minus 67 million ($18 million).

Owing to the consistent improvement of its financial condition, LOT postponed and considerably reduced by as much as two thirds, the money it received from the second state aid tranche. At the end of 2014, LOT received PLN 127 million ($34 million.). It should be emphasized that the amount of state aid has no effect on the result.

The company’s growth policy for 2016 is underway. It will be announced in the next few months new short- and long-haul destinations. LOT will start flying on those routes at the beginning of the next year when the Restructuring Plan is formally ended.

Copyright Photo: SPA/AirlinersGallery.com. The airline attributes the turnaround to its game changing six Boeing 787-8 Dreamliners and its restructuring program as the main reasons for the change in fortunes.

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KISSaLOT – LOT Polish Airlines hangs mistletoe in the highest place in the world

LOT Polish Airlines KISSaLOT

LOT Polish Airlines (Warsaw) has kicked off the Christmas holidays with KISSaLOT. Mistletoe twigs have been hung in each of LOT’s aircraft–the highest place in the world–through January 6, 2015. It’s the airline’s way of bringing people together.

The tradition of kissing under the mistletoe has only recently come to Poland, though it’s been known by its ancestors for centuries. Suspended from the ceiling or over the door, mistletoe is supposed to bring love, harmony and happiness in the coming year to its inhabitants. According to tradition, feuds and disputes cease under the mistletoe; friendships are more durable and people who meet there are allowed to kiss.

LOT operates flights this winter season to more than 40 cities around the world, including New York, Chicago, Toronto, Beijing, and charter destinations such as Cancun, Bangkok, Colombo, Krabi, Ho Chi Minh City, La Romana, Santa Clara, Varadero, Durban and to Zanzibar.

Photo: LOT Polish Airlines.

LOT aircraft slide show:

Video: LOT Polish Airlines. According to the airline (translated from Polish): “On this occasion, at Warsaw Chopin Airport, be prepared for an extraordinary surprise.”

 

LOT Polish Airlines returns to the black

LOT Polish Airlines (Warsaw) is enjoying a financial turnaround, especially with the help of its new Boeing 787-8 Dreamliners. The airline issued this statement:

LOT Polish Airlines has consistently improved its financial standing and is now in the black. At the end of August, the airline exceeded the cumulative breakeven point, thus making a profit on its core business of flying following years of losses. This is in line with the assumptions of the restructuring plan.

Sebastian Mikosz, CEO of LOT Polish Airlines said, “Compared to the corresponding period of 2013, we have attained a better result of PLN 100M ($30,934,000). LOT is seeking to achieve sustainable profitability and we have consistently pursued our goals to meet our annual financial forecast. According to the Restructuring Plan, approved by the European Commission, we are expected to achieve a return of approximately PLN 70M ($21,654,000) in 2014. Our improved effectiveness is marked in all aspects of our operations. Reaching the breakeven 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 helped us achieve these results, as was the case partially last year.”

LOT began to improve its financial results in 2013. Last year closed with a slight loss on the core business of PLN 4M ($1,237,360). This result was still better than assumed in the Restructuring Plan. Last year was also the first year of many in which LOT recorded a net profit. It amounted to PLN 26M ($8,042.840).

LOT continues to finance the difficult restructuring process exclusively with its own resources. By the end of September, the airline will not apply for the second tranche of public aid, which will be smaller than assumed.

LOT owes its positive results to continuous transitions. The carrier continues to improve the quality of services, launch new products, expand its portfolio and approach new passenger groups.

LOT has also increased its transit capacities by as much as 40%, meaning passengers travelling via Warsaw are able to change more comfortably on their way to other cities in Poland and destinations in Central and Eastern Europe.

2014 marks the first year of the “Dreamliner’s effect”. The first LOT Boeing 787 jets started flying in June with now all long-haul flights operated with Dreamliners since August. This aircraft is not only popular among the passengers, but brings tangible benefits, such as fuel savings.

In July 2014, the European Commission made a positive decision about LOT. The Restructuring Plan was approved and public aid was granted. The restructuring process of the company will end at the end of 2015. Until that time, LOT may not operate new flights. However, the first new flights are to be announced at the beginning of 2015.

Copyright Photo: TMK Photography/AirlinersGallery.com. The restructuring program and the new Boeing 787s are game changers for LOT. The 787s have also changed the way people think of the airline. Boeing 787-8 SP-LRC (msn 35940) arrives in Toronto (Pearson).

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LOT Polish Airlines fights back against low-cost rivals with new low fare groups

LOT Polish Airlines (Warsaw) is introducing new “Economy Plus” and “Economy Simple” fare groups to remain competitive against low-fare airlines. The airline just issued this statement:

In June LOT is introducing new Economy Plus class of service in short and medium haul aircraft and LOT Economy Simple tariffs providing discounts of up to 30 percent off normal economy fares.

Passengers traveling in LOT Economy Plus will enjoy a business product for an economy price. They will have a dedicated hotline number, check-in desk, priority baggage and boarding service as well as a dedicated bus when the aircraft cannot be accessed from a jet bridge at Warsaw airport. On board, these passengers will have a choice of meals, beverages and alcoholic drinks just as in business class. They will sit in the front of the aircraft and obtain more miles in the frequent flyer program than before. Premium Economy passengers traveling on long-haul flights will connect to flights in Europe in LOT’s Economy Plus Class.

LOT has also prepared a special, simple and low-cost tariff called LOT Economy Simple created for the short-haul passengers who want to decide for themselves what services to use and when the fare price is the lowest. Ticket prices are 30 percent lower than in standard economy class. With a LOT Economy Simple ticket, a passenger has the option for online or airport check-in and while on board, served a drink and a sweet snack plus score frequent-flyer miles.This tariff is mainly for leisure travellers traveling only with their cabin luggage.To check luggage, there will be charged PLN 60 ($20) extra.In normal economy class, checked luggage is still free.

A ticket in LOT Economy Simple starts at PLN 199 ($65).For example, flights to Brussels are 30 percent off PLN 439 ($144) in Economy Simple vs. PLN 638 ($210) in Economy; to London 29 percent off PLN 499 ($164) in Economy Simple vs. PLN 705 ($232) in Economy and to Paris 24 percent off PLN 449 ($148) in Economy Simple vs. PLN 458 ($151) in Economy.

These new developments are another step in implementing the Restructuring Plan.In the past year, the airline focused primarily on cutting costs, looking for savings and beginning to improve the quality of the product and service standards.

“We significantly improved our results in the past year, but cutting costs alone is not enough,” said Sebastian Mikosz, CEO LOT Polish Airlines. “To achieve sustainable profitability, LOT has to grow and take better care of its passengers, by expanding the portfolio, offering better comfort and a broader range of optional services.”

Copyright Photo: Rolf Wallner/AirlinersGallery.com. Embraer ERJ 170-200LR (ERJ 175) SP-LIE (msn 17000153) in the 1945 retrojet scheme taxies at Zurich.

LOT Polish Airlines: AG Slide Show