Poland’s LOT Seeks 787 Compensation From Boeing Before Year End
LOT Polish Airlines SA said it wants to conclude talks with Boeing Co. (BA) this year over compensation for losses from the three-month grounding of the 787 Dreamliner.
Talks over financial restitution commenced more than two months ago and, if unsuccessful, the airline could sue the U.S. manufacturer, Chief Executive Officer Sebastian Mikosz told reporters in Warsaw today. He would not rule out taking discounts on future plane purchases in lieu of cash.
LOT has bet heavily on the use of Dreamliners to cut costs and help restore the struggling airline to profit, and the global grounding of 787s over electrical faults earlier this year put those plans in jeopardy. LOT reported daily losses of $50,000 from the grounding when its first plane was stranded in Chicago after the inaugural flight.
Since resuming operations, 787 flights for LOT have had a “positive impact” on the airline, with the jet drawing passengers, Mikosz said. The airline now operates five Dreamliners, with a sixth due in March.
“We are very satisfied with the 787,” he said.
LOT, which hasn’t made a profit in six years, is trimming routes and its fleet as part of an effort to restore its financial health and prepare the airline for sale. The Polish government has also eased state-ownership rules that require it to hold a majority stake in LOT, as Polskie Linie Lotnicze LOT SA is known, to facilitate the potential disposal.
Mikosz said there is “general interest” from Asian and Middle East carriers to expand into Europe through investments, without identifying who may buy a share in LOT.
Etihad Airways PJSC, which bought a stake in Serbia’s largest carrier, is in advanced talks to buy a share of LOT, trade publication Aviation Week & Space Technology reported this month without saying where it got the information.
Korean Air Lines Co. (003490) acquired a 44 percent stake in Ceske Aerolinie AS, the Czech flag carrier and the Croatian government is in talks with PT Garuda Indonesia (GIAA) over a sale of its national airline. Non-European carriers can only take a maximum 49 percent stake in a European airline under EU rules.
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