WARSAW, June 20 (Reuters) - Poland’s troubled flag carrier LOT has asked for up to 381 million zlotys ($120 million) in further state aid as part of a new rescue plan, the ministry overseeing state assets said on Thursday.
LOT, one of the world’s oldest airlines, has burned through state funds over the years in failed turnaround plans as it tries to compete with larger rivals and low-cost carriers.
The Treasury Ministry, which controls most state companies and their privatisations, said it would back LOT’s latest restructuring plan under some conditions but had not yet approved further aid, after a 400 million zloty loan in December.
Poland’s government, which has its own budget problems, is reluctant to do more for the airline and is also constrained by EU restrictions on state aid to businesses.
“This is the last attempt to rescue LOT by the Treasury Ministry,” said Treasury Minister Wlodzimierz Karpinski in a statement. “Under EU regulations, the company will not be able to receive support from state funds for another 10 years.”
The carrier had hoped to secure its future with the purchase of several Dreamliner jets from Boeing, becoming the first European airline to add them to its fleet after years of delays. Their grounding in January clouded LOT’s future, although three Dreamliners resumed flying in early June.
The carrier reported a loss of 400 million zlotys in 2012 - its highest since 2008, when it took a hit on fuel options - after writing down the value of the smaller Embraer jets it has used for European flights.
The restructuring plan is crucial for Poland to receive permission for state assistance from the European Commission, which gave preliminary approval to the December tranche.
Poland hopes 84-year-old LOT will avoid the fate of Hungary’s Malev, which collapsed last year after the Commission demanded it give back some 130 million euros in state aid.
The Treasury Ministry did not give any details about LOT’s rescue plan. LOT also declined to reveal them, saying the proposal still had to be negotiated with the Commission.
The airline shed 360 jobs so far this year to bring its payroll to around 1,700 with more reductions expected.