Warsaw, April 2, 2014 – LOT closes the year 2013 with an operating result of minus PLN 4 million.This result is, therefore, by PLN 138 million better than assumed in the Restructuring Plan.For the first time after five years,
LOT recorded net profit in 2013 of PLN 26 million.This is the result of consistently implemented transformation process in the Company.
The ‘Dreamliner effect’ have also contributed to this achievement.
Back in last November, LOT announced that the results for 2013 would be better than expected in the Restructuring Plan.Today’s presentation of detailed figures, following an audit, has been a pleasant surprise.The National Carrier has reported net profit for the first time since 2008.The figure achieved was PLN 26 million towards minus PLN 196 million assumed in the Plan.Thus, the result has been improved by over 222 million.
LOT has also got closer the point at which the core business will be bringing profits.
Here, the Carrier ended up with a little minus (just PLN 4 million) compared to planned minus 142 million.This means over 138 million improvement.119 million of that, LOT earned itself. Macroeconomic factors such as favourable fuel prices had little very impact on the achievement.Furthermore, such factors were offset by unfavourable currency exchange rate fluctuations.With this in mind, the Company benefit of the market situation was only 19 out of the resultant PLN 138 million improvement.Note that this result is also unaffected by the agreement with Boeing concerning the period when the Dreamliners were not used on long-haul flights.
Such a good result was reached despite the fact that LOT had to reduce its carrying capacity under so called compensatory measures.This is a requirement of the European Commission because of the received public assistance. Therefore, LOT carried 5 % fewer passengers than in 2012.In 2013, on board of the jets of the National Carrier travelled over 4.6 million passengers.
Considering the core business, a significant increase of cost effectiveness and raising the revenue contributed to the result improvement towards the Restructuring Plan.
Better results were possible, including but not limited to, thanks to reduced administration cost, employment restructuring, fuel savings and reduced cost of ticket distribution. Also renegotiation of contracts with suppliers pays off. On the other hand, LOT manages the range of destinations more efficiently, expands possibilities for passenger transfer and improves flexibility of the tariffs offered. The Carrier has launched extra services and extended distribution channels, among others with mobile solutions.
Comparing the results year by year, the improvement was most significantly driven by the ‘Dreamliner effect’.Thanks to this state-of-the-art and luxury jet, LOT gained as much as PLN 95 million.The business class (Elite Club) recognised by passengers as the best in transatlantic flights available from this part of Europe has become increasingly popular.
A huge success is also the Premium Club, an intermediate standard between the business and economy class.All in all, thanks to the Dreamliner, the number of the business and premium class passengers in 2013 increased by over 80 % comparing to 2012.Boeing 787 offers also greater business opportunities in terms of cargo carriage.Furthermore, only because, since mid 2013, the long-haul flights (New York, Chicago, Toronto, Beijing) were operated with the Dreamliner, LOT saved several million of PLN on the reduced fuel consumption.
The year 2013 is just a beginning of changes.Regaining sustained profitability, maximum reduction of the second instalment and maintaining financial liquidity are not the only challenges to face in 2014. It is also of key importance to obtain the European Commission acknowledgement for the Restructuring Plan.So far, there have been positive signals from Brussels.The Commission recognises the consistency and effects of the Restructuring Plan being implemented.Another challenge is to maintain the market position facing increasing competition and to effectively use the 6th Dreamliner in
a situation when LOT cannot offer new destinations.
As previously announced, there are various scenarios being considered, apart from operating the jet on flights to the destinations available at the height of the holiday season.
LOT gradually develops the charter business and talks with various partners are underway to explore potential leasing.For 2014, the Polish national carrier announces also to develop the strategy of expanding the range of destinations after completion of the formal restructuring process, i.e. after October 2015, as well as steps to acquire
a strategic investor.
For 2014, LOT maintains the core business profit forecast of around PLN 70 million.
LOT Polish Airlines is one of the oldest airlines in the world. It has been connecting Poland with the rest of the world since 1929. Now planes in LOT colours fly to nearly 60 destinations in Europe, the Middle East, North America and Asia. Many of LOT's pilots are among the European and World Champions in several types of aviation sports. Since 2003 LOT is a member of Star Alliance whose network currently offers more than 21,500 daily flights to 1,356 airports in 193 countries all over the world.