The European Commission has approved PLN 804 million ($259.8 million) in restructuring aid Poland has earmarked for its national flag carrier, LOT.
The commissioners ruled that the aid is in line with EU rules and will lead the carrier to long-term viability by 2015 without causing harm to the market.
The commission first approved a rescue loan of 100 million euros in May 2013, and Poland notified the regulatory body of the pending restructuring one month later. The commission started looking into the restructuring plan in November.
In its ruling, the commission pointed out that LOT is already on its way to a better financial situation, saying that 2013’s results were better than expected, and that a capacity withdrawal and the return of “several” airport slots will help counteract any market imbalances. LOT is pitching in more than half of the cost of the restructuring, the commission noted.
“LOT has prepared a credible restructuring plan that should make it a viable company in the near future,” Joaquín Almunia, the commission’s vice president in charge of competition policy, stated. “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.”
EU Commission approves Polish LOT rescue aid
