LOT bracing for more turbulence as it strives to recover from heavy losses

Polish flag-carrier LOT has disclosed that it made a net loss of zl1.33b ($281m) last year, a deterioration on the zl1.04b of 2020. The airline revealed the figure in annual activity documents newly filed with the Polish ministry of justice. It turned in total revenues last year amounting to zl3.25b, but total expenditure increased to zl4.59b. The full-year operating loss of zl1.3b was substantially greater than the previous figure of zl734m. “Gradually rebuilding the scale of operations [that existed] before the Covid-19 pandemic, with still-limited demand for passenger service and travel restrictions, led to higher operating costs,” the carrier states. It closed the year with a fleet of 59 aircraft on operating lease, 15 on finance lease, and four owned – three Embraer ERJ-145s and an E175. LOT says it has been preparing to simplify the fleet structure and further reduce its cost base as part of the effort to build up its operations, after a number of measures intended for 2020 – including new long-haul routes, and introduction of additional aircraft – had to be postponed. It says it has been having to cope this year with difficulties associated with European Union regulations on retaining slots, stating that these resulted in “less scope” for adjusting the scale of its operation. But LOT adds that the Ukrainian conflict presents an “even greater” challenge to the carrier, owing to the effects from fuel prices and exchange rates which “significantly” increase costs and “make it difficult to achieve profitability of [routes]”. “Owing to the proximity of Ukraine, the perception of Poland as a safe and attractive tourist destination has deteriorated,” it adds. It points out that the various airspace closures – which affect access to airspace in south-east Poland – extend flight times not only to Asian destinations but also closer points, such as cities in Turkey, Georgia, and Israel and even Greece and Bulgaria. <br/>