Boeing Dreamliner Grounding Costs Ailing LOT $50,000 a Day
(Updates with CEO comments in seventh paragraph.)
Feb. 20 (Bloomberg) -- LOT Polish Airlines SA, the first European carrier to receive Boeing Co. 787 Dreamliners, said it is losing $50,000 a day because of the jet’s grounding, compounding an already precarious financial situation.
The 787’s operational suspension has cost the state-owned carrier 7.7 million zloty ($2.5 million) in the last two weeks of January, the treasury ministry said today in a statement to Parliament. The airline’s loss last year totaled 157.1 million zloty even as sales grew 4 percent to 3.31 billion zloty.
The struggling airline was looking to the 787 to help propel a revamp as it seeks to attract a strategic investor. That plan has faltered after the global Dreamliner fleet was grounded on Jan. 16, shortly after LOT received its first jets. One of the carrier’s two Dreamliners is stranded in Chicago, where it had traveled on its inaugural trans-Atlantic flight.
“The original turnaround plan had to be modified because of problems with the 787,” Deputy Treasury Minister Rafal Baniak said in the statement. A revised strategy is due by March 20.
LOT has ditched the 787 from its summer plan and is seeking gap-filler planes while saying it could restore them if Boeing fixes them in time. The lease of three Boeing 767s will be extended, as the Dreamliners will probably remain out of service until October, LOT said this month.
All Nippon Airways Co., the first and largest 787 operator, on Jan. 31 cut sales by 1.4 billion yen ($15.4 million) owing to the grounding, while Japan Airlines Co. on Feb. 5 projected a 1.1-billion yen hit on sales because of the Dreamliner’s woes.
LOT Chief Executive Officer Sebastian Mikosz said the carrier would consider seeking compensation from Boeing for the extra costs incurred. Those negotiations would not start until the 787s are flying again, he told Parliament today.
Mikosz said last week that unprofitable routes would be eliminated, with a focus on trans-Atlantic long-haul flights and European destinations with strong prospects for business passengers.
“Current airline mergers in Europe show that the plan to find a strategic partner for LOT is justified,” Baniak said. “Only finding an investor will give LOT a chance to develop.”
To help draw interest, the government is considering changes in foreign ownership rules to allow a buyer to gain a controlling stake. Turkish Airlines last year considered buying a LOT stake.
--Editors: Benedikt Kammel, David Risser