Air China said to be interested in 49% stake in LOT Polish Airlines

by

Representatives of the Polish government are currently holding talks with Chinese investors for the possible sale of some stake in the state airline LOT, Deputy Prime Minister Mateusz Morawiecki announced on 3 August. A Polish newspaper reported that Chinese carrier Air China is planning to buy a 49-per cent stake in LOT as representatives of the Chinese firm are scheduled to arrive in Warsaw in the following days.

“LOT is our national carrier, which we are trying to save no matter the cost. It is deeply in debt,” the state news agency PAP quoted Morawiecki as saying. As one of the world’s oldest airlines, LOT has been challenged for years by rivals such as Ryanair and other big competitors. In 2012, the government saved the state-owned airline from bankruptcy with an aid of more than 500 million zlotys (US$130 million).

LOT dreamliner

“The previous government has already granted public support for LOT, we cannot grant another and we are looking for an investor,” Morawiecki said. “According to EU law a carrier from outside the EU cannot take over more than 49 per cent of a carrier from the EU, hence we are in talks with potential investors, among others, from China,” the deputy prime minister added.

But a LOT spokesman denied any knowledge of the plans of a capital tie-up between Air China and LOT, saying: “I have no knowledge regarding any planned capital co-operation between LOT and Air China,” Adrian Kubicki, LOT spokesman said. “We have commercial co-operation with Air China, which we want to develop, regarding the Warsaw-Beijing route.”

In April, the Supreme Audit Office in Poland said that LOT has a very small chance of surviving even with aid and improvement if would not have an outside investor to help it.

LOT is a small carrier whose fleet is made up of only eight aircraft including the two new B787 Dreamliners that will start operating next year. It makes an average of 200 flights daily and transports about five million passengers annually.

As part of its One Belt, One Road initiative, China has increased its investments in central and eastern Europe in an effort to strengthen the ties between Europe and China. Last year, CEFC, a Chinese private company, bought a stake in Czech airline firm Travel Service, the second-largest shareholder in Czech Airlines.