EU Commission approves LOT state aid

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By admin July 30, 2014 11:45

EU Commission approves LOT state aid

The European Commission has concluded that restructuring aid of PLN 804 million (around €200 million), which the Polish government plans to give to national flag carrier LOT, is in accordance with EU state aid rules.

The Commission found that LOT’s restructuring plan will allow the company to become viable in the long-term without unduly distorting competition in the EU Single Market.

Commission Vice President in charge of competition policy Joaquín Almunia said: “LOT has prepared a credible restructuring plan that should make it a viable company in the near future. At the same time, it gives up some profitable routes and slots at several congested airports, which creates opportunities for its competitors and reduces the competition distortions brought about by the aid.”

LOT has reported significant losses in recent years. In May 2013, the Commission approved a temporary €100 million rescue loan, upon the commitment of the Polish government to notify a restructuring plan capable of ensuring the long-term viability of the airline.

The new restructuring plan allows for a €200 million capital increase intended to help LOT with refinancing.

The investigation revealed that the restructuring plan, which aims at restoring LOT’s viability by 2015, is based on realistic assumptions and should enable the company to return to long-term viability within a reasonable timeframe. LOT’s actual financial results in 2013 were already better than forecast, and the company reported a net profit for the first time since 2007.

admin
By admin July 30, 2014 11:45