For some time now LOT’s situation has been quite difficult, not only because of external factors, like a rapid increase in fuel prices, recession in the airline sector and increased competition, but also due to internal factors – poor operating results, unprofitable connections due to non-adjustment to market needs, inefficient measures and outdated structure. Dariusz Nowak, appointed to the post of LOT president in April this year, has come up with a recovery programme for the airline. The most important goal is to adjust the company to the requirements of a competitive market. The programme also includes measures designed to considerably improve LOT’s profitability in 2009. In the opinion of Dariusz Nowak, LOT’s ownership structure should be ordered and the company should go public. His long-term objective is to prepare an IPO for LOT and float it on the stock market. “The LOT of my dreams is a commercial airline, a normal company operating and generating profit in a normal way, a company taking care of the passengers and adjusting to changes in a market way,” Dariusz Nowak says. Forming an alliance with other airlines is one of LOT’s strategic goals. LOT would like to be a partner of choice for large alliances. Equally important is cooperation with the Polish Airports company to strengthen the role of Warsaw’s airport, create a profitable business model for long-haul connections and regain control over the Polish market. In financial terms, LOT’s goal is to become a profit-making company in 2010 and achieve ROIC higher than WACC by 2013. LOT also remembers about passengers and plans to considerably improve passenger service and optimize its products to meet customer needs in order to become a carrier of choice for flights to and from Poland.

According to Dariusz Nowak, LOT’s recovery programme has six levers: the client, fleet and flight schedule optimisation, revenue stimulation, cost effectiveness, restructuring of the group and cooperation within an alliance. “We have made quite an effort to maximise our sales. We want to cut costs by PLN250 million. We believe this will enable us to become competitive on the market, which is our main goal,” says Dariusz Nowak. “We are also thinking about making our group leaner and cutting administrative costs.” LOT also wants to enter the Ukrainian market. It is one of the strategic alliances planned by LOT. The Euro 2012 soccer tournament to be hosted by Poland and Ukraine is supposed to help in this respect. “We should modernise and improve transport policy between the two countries. We support signing an agreement which would enable us to operate in Ukraine under conditions similar to those we now enjoy in most European countries. We see Euro 2012 as an opportunity to gain momentum,” Dariusz Nowak says. “We want the event to be exploited to improve transport policy. We believe that success depends on whether or not the aviation industry is liberalised. We are not afraid of the competition.”