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The Warsaw Voice » Business » March 12, 2008
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LOT Looking a Whole Lot Better
March 12, 2008 By A.R.    
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The Polish national airline LOT is now carrying more passengers and its bottom line is looking up. LOT brushed off stiff competition, rising fuel prices and an appreciating local currency last year to post a zl.83 million profit in its core business activities. This compares with a loss of zl.43 million for 2006. The carrier's net profit for 2007 came to zl.161 million. This was an increase of 447 percent on the zl.32 million recorded in 2006.

LOT managed to achieve all this under trying market conditions. Budget airlines increased their market share to 50 percent, fuel prices skyrocketed and the rapid appreciation of the zloty sent revenues plummeting. LOT derives around 26 percent of its income in U.S. dollars and 35 percent in euros. "These results reflect our operating strategy," says LOT chairman Piotr Siennicki. "The results for our core business were excellent, improving by zl.125 million over the previous year."

LOT carried 4.28 million passengers last year, 15 percent more than in 2006, and the number of flights increased by 7 percent to 89,347. This latter figure was partly due to new routes being opened up. The passenger load factor rose from 74.1 percent to 75.7 percent, and revenue-passenger-kilometer (RPKM) increased 9 percent to 7.3 billion.

In October, the carrier unveiled its strategy for 2008-2012. The company is planning to have a single model for each type of aircraft and to allocate particular planes to long-range, short-range, regional and national routes. There will only be two brands in the group. LOT will remain the operational core and the primary source of income, while Centralwings will be the group's budget alternative. The company intends to increase the number of flights it offers to eastern destinations, including Russia and Ukraine, and to sell 40 percent of its tickets online by 2012. LOT managers are also keen to have the company listed on the Warsaw Stock Exchange this year and want net profit to break the zl.200 million barrier by 2012.

LOT has one of Europe's most modern fleets and flies to more than 60 European and North American destinations. In 2009, LOT will become the first European airline to fly the Boeing 787 Dreamliner aircraft.
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