Poland secures EC approval for LOT rescue package

European regulators have cleared the Polish government’s request to provide national carrier LOT Polish Airlines with around PLN2.9b ($787m) in financial support under the temporary easing of state aid rules. The aid comprises a PLN1.8b subsidised loan and a capital injection of PLN1.1b. European competition commissioner Margrethe Vestager says: ”With these measures, Poland will contribute approximately E650m to help the airline weather the current coronavirus crisis. The decision ensures that the state is sufficiently remunerated for the risk taxpayers assume, and that the support comes with strings attached, including a dividend ban as well as further measures to limit distortions of competition” The Commission notes that LOT suffered substantial losses due to the coronavirus outbreak and the related travel restrictions imposed to limit its spread, conditions which continue to deteriorate the airline’s financial health. ”As a result, LOT is currently facing a risk of default and insolvency,” the Commission says. “The aid measures intend to restore LOT’s equity and liquidity position, in order to ensure the continuation of the air transport services in Poland that LOT provides.” The subsidised loan will be granted before 30 June 2021 and will last for up to six years. <br/>