Poland seeks to end legal block on majority sale of LOT
WARSAW, April 2
WARSAW, April 2 (Reuters) - Poland's government wants to scrap a law forbidding the sale of a majority stake in its flag carrier LOT, hoping the prospect of outright control will attract buyers for the airline, already on life support.
The centre-right government, which injected 400 million euros ($514 million) into LOT in December when it warned it was running out of cash, said the inability to buy more than 49 percent of the carrier was deterring would-be purchasers.
"Poland will be able to offer a majority stake, which will give the opportunity to attract a stable and strong investor, either from the sector or a financial one, who will ensure LOT's dynamic growth and will allow it to effectively compete with other carriers," Treasury Minister Mikolaj Budzanowski said.
The government is reluctant to continue funding LOT, which is pushing through heavy job cuts and a reduction in its fleet to stem losses that have mounted to 1.3 billion zlotys ($400 million) since 2008.
The 84-year-old airline wanted to put Boeing's long-delayed Dreamliner 787 at the heart of its refreshed fleet, but the grounding of the trouble-prone jet has further complicated the plans of its first European buyer.
Analysts said it was difficult to find a European airline willing to buy LOT in its current state while EU rules make it almost impossible for global players to control a European carrier.
"For years Lufthansa wanted to buy LOT, but after so many political obstacles it walked away and won't return," said Marek Serafin, a former LOT executive who runs industry website PRTL.pl.
"And with the current mess, who else would want to buy LOT now?"
Poland is awaiting clearance for public aid to LOT from the European Commission, without which the carrier could share the fate of regional rival Malev, which collapsed last year after it was forced to hand back cash to the Hungarian government.
Poland would rather follow in the steps of the Czech Republic which agreed to sell 44 percent of loss-making Czech Airlines (CSA) to Korean Air for 2.64 million euros.
The rightist opposition, which for years had criticised Prime Minister Donald Tusk's handling of LOT, said the government has failed to present a viable plan for its survival.
"They are pushing towards privatisation at any price instead of putting forward concrete plans for strengthening LOT," said Adam Kwiatkowski, a deputy for the Law and Justice party (PiS).
The proposed law approved by the government still needs to be passed by parliament, in which the ruling coalition holds a slim majority.
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