Tag Archives: LOT Polish Airlines

LOT Polish outlines its growth plans, will increase the Dreamliner fleet to 16, return to Newark

LOT Polish outlines its growth plans, will increase the Dreamliner fleet to 16, return to Newark

LOT Polish Airlines is planning further profitable growth including a return to Newark and a new route to Seoul. The airline issued this statement:

LOT presented its 2020 profitable growth strategy. During that time the carrier plans to achieve sustainable viability and become a leading airline in Poland and Central and Eastern Europe servicing over 10 million passengers per year, gradually increasing its fleet and launching new flights.

LOT’s strategy is based on five pillars: taking advantage of potential that lies in a growing market, developing a network of connections and a hub, competition, boosting effectiveness and building a committed team.

“Taking maximal advantage of the fact that the market of air services in Poland and the Central and Eastern Europe is bound to grow at a much quicker pace than in other European countries is a starting point for our plan of further growth. We have estimated that in Poland alone the number of passengers is going to grow at about 5% per year. It is a huge opportunity for us,” says Rafał Milczarski, LOT’s CEO.

LOT is going to regain its lost market share in Poland, aiming for approx. 25%. It means that the number of its passengers as early as in 2020 is going to exceed 10m vis-a-vis 4.3m in 2015. Hence the airlines have announced that they are going to continue to develop their network of connections with long-haul flights being its most important element.

“Long-distance flights are the most profitable part of our business and being the only airlines in the region, LOT has the related growth potential. We are mostly going to focus on developing flights to North America and most important business centers in Asia. Connections to Central Asia and to the Middle East are particularly interesting from our perspective. Warsaw’s geographical location allows to develop an unmatched offering of flights to countries such as Kazakhstan or Iran. We are going to take advantage of that potential,” adds Rafał Milczarski.

In just a few weeks LOT is going to launch a direct flight to Seoul and next year another connection to Newark in the USA is scheduled to be opened. Flights to the NYC’s second airport will be initially operated 4 and then 5 times a week, starting from the beginning of the 2017 summer season.

“We are happy to return to Newark because it is an important connection to the Polish community. Newark is also an important interchange for passengers who continue their travel to other destinations in the United States and it simply extends our offering,” says Rafał Milczarski.

Soon LOT is going to announce more new destinations. LOT’s CEO points out that as the network of connections keeps developing, the carrier’s Warsaw hub must keep pace as well. Ensuring the shortest and most convenient transfers is one of key conditions underlying the strategy’s implementation.

“As new long-distance flights are launched, the number of short-distance flights, especially from the Central and Eastern Europe, is going to go up as well. We assume that the percentage of transfer passengers, that is, those who change planes in Warsaw, is going to approximate 50% in 2020. Being our hub, the airport must keep up with our development, that is, ensure appropriate infrastructure and capacity. It is a huge challenge for the Warsaw Chopin Airport which in 2020 is going to reach its capacity limits. In the years to come LOT is going to continue with developing its hub at the Warsaw Chopin Airport but ultimately its offering will have to be transferred to another, centrally located airport in Poland,” says LOT’s CEO.

A convenient timetable of flights is not the only competitive edge LOT enjoys. The Polish carrier is going to compete on the market offering the best value for money. LOT has been planning more customized promotions and working on developing additional products and services.

“LOT will no longer be perceived as expensive airlines. Travelling with LOT Polish Airlines can be inexpensive, plus we are capable of going beyond what other low-budget airlines can ensure, namely, for example, free checked baggage or free meals on board,” says Rafał Milczarski. “Competition requires us to build a strong sales structure on all markets on which we are present. We are going to strengthen our co-operation with travel agents who are the backbone of our sales operations in the corporate sector and on the other hand we want to increase the footprint and sales via our lot.com Website which is intended to be the source of best deals for passengers who are most sensitive to price,” adds LOT CEO.

LOT intends to measure customer satisfaction with its services on a regular basis. That ratio is one of the elements that help monitor the strategy’s implementation.
To improve its product portfolio and develop its network of connections LOT will need a strong and efficient fleet. The company estimates that in 2020 it will operate a total of approximately 70 aircraft, including 16 Dreamliners and approximately 15 new single-aisle planes with 150-plus seating capacity.

“LOT is able to develop its fleet on its own thanks to operating leases in that way significantly reducing a burden on the company’s finances and improving availability and delivery time for the planes. In 2017 the first few single-aisle aircrafts are going to be added to our fleet. We are in the final phase of negotiations. We also expect the delivery of two new Boeing 787 Dreamliners. We are going to simplify and standardize our target fleet,” says Rafał Milczarski.

One of key factors allowing LOT to achieve sustainable viability involves steadily increasing the company’s effectiveness in all areas of its operations. Today LOT is one of the most effective airlines in Europe in terms of costs. However, its cost effectiveness ratio is planned to improve to reach 5.5 USc/ASK vis-a-vis the present level of 6.51 USc/ASK. LOT will also ensure the highest possible operational reliability. Its goal is to maintain service regularity at 99% and punctuality at 87%. Thanks to that, it will be among the most punctual airlines in the world.

Copyright Photo: LOT Polish Airlines Boeing 787-8 Dreamliner SP-LRC (msn 35940) PAE (Nick Dean). Image: 911988.

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LOT announces increased frequencies to North America and new destinations

LOT Polish Airlines (Warsaw) in the winter season of 2016/2017 will enhance its presence in the US by increasing frequencies from New York (JFK) and Chicago (O’Hare) to Warsaw. The Polish carrier has also announced several new long-haul destinations from its Warsaw hub to Bangkok, Seoul and Tokyo (Narita). LOT will also launch more than a dozen new European connections, thus expanding its hub and providing convenient connecting flights to passengers flying to such cities as Ljubljana, Zurich, Cluj-Napoca and Nice.

The airline continued:

Long-haul flights are the most important part of LOT’s strategy. The first new long-haul flight is scheduled for January 13, 2016 and will be to Tokyo–the first direct connection from Poland and New Europe (Central and Eastern Europe) to Japan. Bangkok and Seoul will start in autumn 2016. The Polish carrier will also enhance its presence in New York and Chicago by adding two additional frequencies to its winter schedule from each city.

“Opening new long-haul destinations is essential for our development, which is why we will launch them as quickly as possible,” said Sebastian Mikosz, CEO of LOT Polish Airlines.

“Even now, connections operated by the Dreamliner (above) are the most profitable part of our business.

LOT is the only airline that offers on a larger scale, convenient, regular flights from Poland and New Europe to New York, Chicago, Toronto and Beijing. Four current connections will be supplemented with three more, and later this year, LOT will announce two new long-haul destinations to operate in 2016. After opening these five new destinations next year, LOT will more than double its network of long-haul connections compared to today. We want our hub to develop along with us. Opening more than a dozen European connections guarantees even more convenient transfers for new passengers from Poland and the entire region. But the new connections are just the start. Next year we plan to enhance our presence in those destinations where we already operate. This means, for example, an increased frequency of flights from Chicago and New York in the winter season.”

In addition to the new long-haul flights, LOT will begin to fly to three new destinations in Europe in 2016: from Warsaw to Venice and Cluj-Napoca (January) and to Ljubljana (March). LOT will also return to routes that were suspended due to the Restructuring Plan. Thus LOT’s passengers will be able to fly directly from Warsaw to Barcelona (January) and to Athens, Nice, Zurich and Beirut (March). From January 2016, flights between Warsaw and Belgrade, Dusseldorf, Yerevan, Chisinau, Zagreb and between Gdansk and Krakow will be restored, many of which are the connections suspended since July this year, as part of the final pool of compensatory measures required by the European Commission.

LOT is able to operate the entire first phase of its network development using only existing aircraft.

Copyright Photo: Chris Sands/AirlinersGallery.com. Boeing 787-8 Dreamliner SP-LRC (msn 35940) departs from Calgary.

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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).

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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).

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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.

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