LOT Airlines on verge of bankruptcy

LOT airlines, Poland’s national carrier, has announced a 700 million zlotys (155 million euros) loss for 2008. If investors do not come forward soon, LOT could go into bankrupt within weeks.

Over 300 million zlotys of the loss was incurred by contracts for fuel, which were made when oil prices were high last year.
It has been reported that LOT ‘s financial situation is so bad that an auditor has refused to sign the company’s annual balance sheet.

The Polish government cannot bail out the airline because this would contravene European Commission competition rules. The carrier has already been heavily capitalized by the state, back in 2001.

The airline had begun restructuring, liquidating its subsidiary, no-frills airline Centralwings. Deep staff cuts are expected soon, though trade unions have vowed to resist them.

A trade unionist at LOT Ground Services handling company said: “We are considering the possibility of striking. We will simply stop loading baggage.”

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