CEO: LOT Polish Airlines plans minimum 30% ASK growth in 2016

LOT Polish Airlines plans to grow ASKs at least 30% starting in 2016, when a European Union (EU) ban is lifted prohibiting the carrier from growing capacity or adding routes until it completes restructuring.
                                                                       
“We have already started to work on growth for next year,” CEO Sebastian Mikosz told ATW in Warsaw. “This includes a very intensive review of the network and we designed a financial model for a sustainable strategy. Our absolute minimum growth target is at least 30% in terms of ASKs (capacity) per year. We want this.”

Mikosz said selecting new routes is difficult. “Making a choice between adding frequencies and adding destinations to prepare the company for growth is not easy.”

In addition, LOT is preparing to release a request for proposal (RFP) for more aircraft next year. “We will announce the RFP when we really know which network we will operate,” Mikosz said. “The number of additional aircraft needed is under evaluation.”

One of the carrier’s six Boeing 787s that had been wet leased to Air Europa will return to LOT in April 2016, he said. “Regarding more aircraft for 2016, we could need one or two additional widebodies, as well as several narrowbody aircraft in the 150+-seat range.”

Mikosz said the restructuring process has been very painful. “You have to bring better results with fewer flights. I feel like the guy that can’t do much more but sit in a cage.”
  
According to EU rules, LOT has had to keep certain routes closed—such as to Zurich, Athens, Berlin and Nice—as well as operate fewer frequencies on other routes. The carrier is also unable to use its equipment more efficiently for the rest of the year when the ban is lifted. “This creates big cost inefficiency with crew, maintenance and so on. For example, LOT’s Embraer fleet could operate up to three additional hours per day per aircraft when the restructuring plan is completed.”

In April, LOT reported its first profit in seven years with a 2014 annual net profit on its core business of PLN99 million ($26 million), reversed from a PLN67 million loss in 2013.

“The first profit is a strong signal. This has some benefits—it shows the market and suppliers that we are doing what we promised. We continue our story quarter by quarter. LOT is off the radar from negative media attention. Last year, there was question mark about our continuation.”

(Kurt Hofmann - ATWOnline News)