LOT Polish Airlines ended 2013 in the black. It posted an $8.6 million net profit, its first annual profit since 2008. It also had an operating loss of $1.3 million, but the result was $45.6 million better than expected in LOT's current financial and corporate restructuring plan.
In a press release, the airline said: "The main reasons for this result are a consistently implemented transformation process in the company and the ‘Dreamliner effect’."
By operating the Boeing 787 Dreamliner, LOT said it gained as much as $31.4 million in revenue for 2013 and carried 80 percent more business and premium class passengers than in the previous year.
Back in November 2012, LOT announced the 2013 financial results would be better than expected in the restructuring plan. "Today’s presentation of detailed figures, following an audit, has been a pleasant surprise," the airline said in a press release, noting that LOT is moving in the right direction for the core business to become profitable.
The 2013 profitability was reached even though LOT was forced to reduce its capacity under compensatory measures required by the European Commission. In 2013, LOT carried 4.6 million passengers, 5 percent fewer than in 2012.
Helping the 2013 results were reduced administration costs, employment restructuring, fuel savings, a reduced cost of ticket distribution and renegotiation of supplier contracts. The airline said it also managed its range of destinations more efficiently, expanded connection possibilities for passengers and improved fare flexibility.
It also added extra services and extended distribution channels including mobile solutions. Finally, LOT said its Elite Club, a business class service, and Premium CLUB, an intermediate standard between the business and economy class, were both helpful in its positive financial results.
What's ahead? LOT said it needs to regain sustained profitability, maintain financial liquidity and gain European Commission acknowledgement of its restructuring plan.
"Another challenge is to maintain the market position where LOT is facing increased competition and to effectively use the 6th Dreamliner in a situation where LOT cannot offer new destinations," the airline said. It's also looking at adding charter business.
For 2014, LOT plans to develop the strategy of expanding its range of destinations (after completion of the formal restructuring process in October 2015) and to take steps to acquire a strategic investor.
LOT Polish Airlines, a member of the Star Alliance, has been connecting Poland with the rest of the world since 1929. Today, 36 LOT aircraft serve more than 50 destinations across Europe, the Middle East, North America and Asia.
For information on LOT, visit www.lot.com/us/en.