Kraków 2014-04-12
LOT Polish Airlines perspectives, in our opinion.
The vast majority of the media predicted the rapid collapse of the Polish company PLL LOT. Perhaps it will. However, the main task of these media is to create a social feeling that nothing can be done and LOT Polish Airlines should be sold or brought to a fall. These media hid that the company PLL LOT was profitable until 2007. Because the harmful policy of the masonic-liberal government of Prime Minister Donald Tusk would be revealed. It was a deliberate act.
Let’s ask ourselves, – What is commercial aviation for and why do people fly airplanes?
Aviation is commercial and shipping companies around the world are making good money from it. We remind you that the commercial activity began in the USA in the 20-years of the 20th century, when it was realized that you can earn good money on the transport of letters and parcels. Letters by air were more expensive, but they reached the addressee within a dozen or so hours. At that time, people did not rush onto the airplanes because the tickets were expensive and the novelty was terrifying. However, in the 30s and 40s, the dynamics of the growth of passenger transport was so great that the airlines were constantly demanding larger aircraft from manufacturers. Tickets were systematically cheaper. It was the same in the Republic of Poland, until the aggression of the German and Russian armies against Poland.
Nowadays, people board airplanes not because they love airplanes and like to spend hours in terminals. Only because they want to get to their destination quickly, and that of a trip that is usually necessary. And they travel because they want to meet their loved ones. Secondly, in connection with the work performed, and only in the last place, for tourist and pilgrimage purposes. It is enough to compare the vital interests of individual countries and we will already know where the citizens of these countries most often travel; Brits to the Middle and Far East, to Australia and New Zealand and the USA. French to West Africa and South America. Japanese to USA. And so on.
And what should our directions be? First of all, where the Polish diaspora lives. From these destinations, we only fly to the USA and Canada. And they should also go to South America, Australia and the East.
In return, we are offered flights to Ethiopia, to Addis Ababa, to the poorest country in the world, but there is a Boeing 787 Dreamliner service base. Because the Polish government spurned Boeing’s proposal to create such a base in Poland. And here is the main problem of PLL LOT’s troubles, at the root of which lies the anti-national and anti-Polish policy of the Polish authorities at the time. Prime Minister Donald Tusk, together with the Minister of Foreign Affairs Radosław Sikorski, are liquidating further diplomatic posts, effectively cutting off the Polish diaspora from the motherland.
Presidents of PLL LOT.
Mr. Marek Grabarek (June 13, 2003 – 2006). From June 2003, he was acting the president. The unionists were quietly hoping that Mr. Dariusz Krawiec, former president of Impexmetal and Elektrim, would become the president. Marek Grabarek’s candidacy was not liked by the unions due to his controversial, illogical decisions. On the one hand, he presented the company’s financial situation as bad, on the other hand, some money flows out of the company.
Mr. Krzysztof Kapis (March 29, 2006 – November 14, 2006) Mr. Krzysztof Kapis was elected the President of LOT Polish Airlines on March 29, 2006. Mr. Krzysztof Kapis, the current head of the Civil Aviation Authority. As the President of the Civil Aviation Authority, he participated in the work of many international institutions related to aviation, including the Coordination Committee of the European Civil Aviation Conference (ECAC), the Governing Council of the European Aviation Safety Council (EASA), and the Temporary Council of the European Air Navigation Safety Agency (Eurocontrol). Mr. Krzysztof Kapis is also the representative of Poland at the ICAO General Assembly. The new president of LOT already worked at LOT Polish Airlines – in 1975. – 2001 He was, among others, commercial director and director of the marketing and sales department, and in the 90s, he was the director of PLL LOT’s representative offices in Germany and Sweden. Mr. Krzysztof Kapis is a lawyer by education – he graduated from the Faculty of Law at the University of Warsaw. On November 14, 2006, the Supervisory Board of PLL LOT dismissed the president, Mr. Krzysztof Kapis, and delegated Mr. Tomasz Dembski to the position of the President of the Supervisory Board. The spokesman for the management board of PLL LOT, Leszek Chorzewski, refused to provide detailed information on the decision of the Supervisory Board. According to unofficial information, Mr. Krzysztof Kapis left the Supervisory Board meeting during its duration. Many suspected Mr. Krzysztof Kapis of espionage activity from 1975.
Mr. Tomasz Dembski (acting president November 15, 2006 – February 2007). Mr. Tomasz Dembski is a PhD in economics, a graduate of the Faculty of Management at the University of Warsaw, the Faculty of Applied Economics at the Catholic University of Leuven, and the Institute of English Studies and the Institute of Applied Linguistics at the University of Warsaw. He studied at the International Institute for Management Development in Lausanne, completed Akzo Nobel, Mercury International, ODiTK management courses, UN training programs, and training for OSCE employees. Mr. Tomasz Dembski was a man of the PiS party and had the support of the ministry. So when PiS instructed the Supervisory Board to finally elect Mr. Tomasz Dembski as president, there was a sharp opposition. The competition for the position of the president, which was supposed to be a formality, became a real competition, because the counter-candidate of Mr. Tomasz Dembski, Mr. Jarosław Lazurko (head of the PZL-Okęcie plant in Warsaw), gained the support of the crew and representatives of the Swiss shareholder, so there was a risk that he would win. Mr. Jarosław Lazurko, after talks with government representatives, resigned. The protest was expressed by trade unions in LOT Polish Airlines.
At that time, our country was waiting for the purchase of 25% of LOT shares from a Swiss shareholder, the receiver of SAirLines, the owner of bankrupt Swissair. In 2000, Polish authorities recognized Swissair as a strategic investor and sold him a quarter of the shares in LOT Polish Airlines. Somehow they did not realize that Swissair was on the verge of bankruptcy, which gave a bad testimony to the competence or integrity of the then ruling team. The purchase of shares by the coalition of PiS, LPR and Samoobrona should be considered a success.
Mr. Marek Mazur (February 13, 2007 – March 23, 2007) After tensions in January 2007, between LOT Polish Airlines, trade unions, Swissair representatives and the Government of the Republic of Poland, on February 13, 2007, Mr. Marek Mazur became the president. He was not supported by the Ministry of the Treasury. Mr. Marek Mazur graduated from the Faculty of Foreign Trade at SGPiS. He obtained a PhD in economics from the Faculty of Foreign Trade of this university. He completed the course of investment advisers Maruman Shoken Inc. in Nagoya and the Advanced Management Program course at the Wharton School of Business. He was, among others, deputy president of the National Health Fund for financial matters (2003-2005), advisor to the deputy prime minister for economic affairs (1994-1997), advisor to the deputy prime minister on public finance reform, advisor to the minister of finance (1991-1993) , chairman of the supervisory board of PBK SA, member of the supervisory boards of BGK, Huta Stalowa Wola. He is fluent in English, French, Russian, German, Spanish and Japanese (spoken). Mr. Marek Mazur was 52 years old at the time, he had a wife and son. He has a sailplane and airplane pilot’s license.
At that time, the State Treasury owns 68% of the shares of PLL LOT, the trustee of bankrupt Swissair – 25%, and employees – 7%. But on March 23, 2007, the Supervisory Board of Polskie Linie Lotnicze LOT S.A., acting in accordance with the Code of Commercial Companies and the Company’s Articles of Association, dismissed Mr. Marek Mazur from the position of President of the Management Board – General Director.
Mr. Piotr Siennicki (April 16, 2007 – February 2008) On April 16, 2007, the Supervisory Board of PLL LOT appointed Mr. Piotr Siennicki as the company’s president. Mr. Piotr Siennicki is a graduate of the Faculty of Electrical Engineering of the Warsaw University of Technology (Master of Science in Electrical Engineering), post-graduate studies at the Faculty of Management and Marketing of the University of Management and Banking, as well as post-graduate studies in company law at the Collegium of Management and Finance of the Warsaw School of Economics. He obtained the MBA degree from the Gdańsk Foundation for Manager Development and the University of Gdańsk in cooperation with the Rotterdam School of Management. Siennicki performed, inter alia, the functions of: Vice President of the Management Board of Zakład Energetyczny Płock Rejon Energetyczny Gostynin Sp. z o.o. (in 1997-1998), President of the Management Board, CEO of Zakład Energetyczny Płock SA (in 2001-2004), Director of the Department for Coordination of Restructuring and Integration Processes of BOT Górnictwo i Energetyka SA, Project Manager of BOT Group Integration (in 2005- 2007). From 1996, Mr. Piotr Siennicki was also a member of supervisory boards of capital companies of the State Treasury. PLL LOT did not have a president since March 22, 2007, when the Supervisory Board recalled Mr. Marek Mazur, appointed on February 13, 2007, from this position.
In February 2008, Mr. Piotr Siennicki resigned from his position. He gave personal reasons as the reason.
Mr. Dariusz Nowak (February 28, 2008 – March 5, 2009). On April 7, 2008, the Supervisory Board of PLL LOT appointed Mr. Dariusz Nowak to the position of president of the company, who so far has been the head of the air carrier (from February 28, 2008). Mr. Dariusz Nowak is an economist and statutory auditor by profession. Mr. Dariusz Nowak is a graduate of the Faculty of Foreign Trade at SGPiS (now the Warsaw School of Economics). He is also a member of the EUROCONTROL Audit Council. International Organization for the Safety of Air Navigation and Audit Member of SESAR JU.
On March 5, 2009, Mr. Dariusz Nowak resigned from the position of the president.
Mr. Sebastian Mikosz (acting March 2009 / May 2009 – September 2010). From March 5, 2009, the duties of the president were performed by Mr. Sebastian Mikosz, previously a director in the consulting company Deloitte. During his term in office, there were huge reductions in employment.
Mr. Zbigniew Mazur (acting October 2010).
Mr. Marcin Piróg (October 2010 – December 2012) Mr. Marcin Piróg, during the welcome of the first B.787 plane, spoke about the good condition of the company, and after a month he said that the company needs financial support. After these words, he was dismissed.
Mr. Zbigniew Mazur (acting on December 21, 2012 – February 6, 2013, during the competition for the new president).
Mr. Sebastian Mikosz from February 6, 2013. "President brought in a briefcase" by the Minister of the Treasury, Mr. Mikołaj Budzanowski. The remaining four candidates did not have the support of the government, i.e. Prime Minister Donald Tusk.
The current president, Mr. Sebastian Mikosz, has already held this position for nearly two years (2009-2010). Then he left the company with a debt of PLN 300 million. At the same time, he spent PLN 30 million on consulting companies. He is recognized by trade unions as a man who has no idea about commercial aviation. Mr. Sebastian Mikosz has a clearly defined task; Sell the company. There are three conditions; 1 keeping the logo, 2 leaving the management in Warsaw, 3 maintaining the connections beyond Wielka Woda. Currently, Mr. Sebastian Mikosz wants to raise his appraisal for "successes" in 2013, and is leading further layoffs from the workforce.
Management of the PLL LOT company.
The PLL LOT company operates on the basis of the Act of June 14, 1991 on the ownership transformation of a state-owned enterprise. In the spring of 2013, the Polish government decided in a draft of a special act, which it presented to the Polish Parliament, on the sale of a controlling stake of the State Treasury of LOT Polish Airlines. This decision means nothing else than the loss of State Treasury control over this company. In 2013, airplanes with LOT marks operated on 92 air routes. The company’s main airport is Warszawski Port Lotniczy im. Frederic Chopin. LOT Polish Airlines has in its assets shares of other air carriers, such as: Eurolot – 38%, which owns 8 Bombardier Dash Q400 and 9 ATR 72-200 z and 4 ATR 42-500 planes. In the spring of 2014, PLL LOT had a fleet; B 787 – 5 pieces, B 737-400 – 3 pieces, Embraer 195 – 6 pieces, Embraer 175 – 12 pieces, Embraer 170 – 10 pieces.
The management of the PLL LOT company in the last seven years consisted in collecting further public aid from the State Treasury. So the company lives thanks to the financial drip. Among others, LOT Polish Airlines received large blocks of shares in companies owned by the State Treasury, e.g. PLN 1.4 million shares in Pekao SA, which the carrier sold in 2009, and the sale of "unnecessary" assets, such as the LIM skyscraper, i.e. the Marriott hotel headquarters in the center of Warsaw.
In 2012, the carrier managed to sell LOT Services and LOT Catering (the former was sold to LOT Cargo, and the latter – to the Regional Economic Fund, 100% owned by the State Treasury). In 2011, he sold his shares in LOT Aircraft Maintenance Services (the state-owned Industrial Development Agency) and in Petrolot – Orlen. He also leased the office building in which he is located, on which he earned several hundred million zlotys.
Preparations for the liquidation of the PLL LOT company were carried out by Prime Minister Donald Tusk, at least since 2010. He liquidated more airline missions in the country and abroad. In 2010, despite the resolutions of Krakow councilors, he canceled direct connections from Krakow to Chicago and New York. Although they were well occupied by passengers. Krakow councilors also appealed to the then Minister of the Treasury, Aleksander Grad. Unsuccessfully. "Flights to Chicago and New York enjoy unflagging popularity, and there are non-substantive reasons behind the decision of the national carrier" – assessed the councilors in the resolution. They emphasized that due to this decision, Poles in the USA and their families living in Małopolska will be forced to incur additional costs of traveling to the Okęcie capital city or using the services of foreign carriers.
Let us recall that the first connections Krakow – Chicago and Krakow – New York were launched in 1997. The first LOT Polish Airlines flight from New York to Krakow landed at the airport in Balice near Krakow on Sunday, December 7, 1997. A day later, the first direct flight from Chicago arrived. In the best years, during the summer season, the schedule had five flights a week to Chicago and two to New York. There were 1-2 connections to Chicago for the winter. In the 1990s, a seasonal connection to Toronto, Canada was also maintained for two years. The last flight of the B 767 took place on October 27, 2010. All flights were served by Boeing 767 PLL LOT planes. Therefore, please do not say that Prime Minister Donald Tusk does not spit on Poland and the Polish diaspora.
The fact that LOT Polish Airlines applied for government aid at the end of 2013 (in the first tranche by PLN 400 million, but in total it wants about PLN 1 billion), is largely due to the fact that it has little unnecessary assets to fly. In addition, it is an asset that is difficult to sell: 33.3% of shares in Casinos Polska (it has seven casinos), 38.0%. shares in Eurolota, handling companies and a 10-hectare plot of land at the Okęcie airport, suitable for the construction of office buildings or hotels. It will be difficult to get a satisfactory price for this property. LOT’s current situation is also a result of overdue debts. For example, a large part of the cash obtained from the sale of LOT Aircraft Maintenance Services was used to cover them.
Of course, the blame is also on low-cost companies and the Modlin Airport.
Accountingly, it looks like this. Fuel is about 30% of the total cost. The salary expenses are around 10%. In 2013, LOT Polish Airlines spent about PLN 1 billion on fuel. Also in 2013, the company’s leasing receivables amounted to approximately PLN 1 billion. If the zloty is unstable and its value drops by 10%, the company’s losses will amount to an additional PLN 100 million. This is one of the reasons why the present, masonic-liberal government wants Poland to adopt the "Euro" currency. However, on the other hand, fuel bought in "Euro" will be 10-15% more expensive and the calculation does not make sense.
Sale of LOT Polish Airlines.
Competition on the European aviation market is fierce today. The conditions are dictated by the three greatest; Lufthansa, Air France / KLM and British Airways together with Iberia, i.e. IAG. Many smaller carriers have huge problems. Some companies fail, others are saved by governments, and others are taken over by stronger competitors. There are several ways for LOT Polish Airlines. One of them is selling. They were interested in our carrier; Turkish Airlines and Air China. Other companies showed some interest; Singapore Airlines and two Arab airlines: Etihad Airlines from Abu Dhabi and Qatar Airways. However, these companies are outside the European Union and sales are temporarily impossible. Non-EU companies can only own or control an airline from the European market once it has been bilaterally agreed between the third country and the EU authorities.
The German lufthansa was interested in buying LOT Polish Airlines. However, the current government, fortunately, is afraid of the political consequences of selling the line to Germany. Therefore, it did not announce a privatization tender. The effect of selling PLL LOT to Germany would be such that the PLL LOT brand would disappear.
However, it seems Lufthansa is not interested in buying it, seeing that it is only a matter of time and it will be a downfall. And then it will take over passengers and connections, completely rest, and pay nothing for it. Anyway, it had already taken over our routes to the Far East a few years earlier. Lufthansa has acquired a large stake in Brussels Airlines, SwissAir and Austrian Airlines in recent years. So he has Central Europe under control.
The effects of the collapse of the PLL LOT company.
Currently, Prime Minister Donald Tusk is waiting for the decision of the infallible European Commission, which will state that the financial aid was unjustified and will order the funds to be returned. In addition, the European Commission has announced that it will look at the previous financial aid to see if it complies with EU law. And LOT Polish Airlines will collapse like the Polish one hundred years. And this will be salutary for the Prime Minister, because he meant well.
The effects of the collapse of PLL LOT are predictable. It will not be the end of the world. And again Prime Minister Donald Tusk will say – "Poles are fine", and the media favorable to him will surround him with a wreath of wisdom. Experts on the subject often cite examples of the collapse of companies such as the Belgian Sabena or the Hungarian Malev. However, the problem is that Belgium is a country that we pass by car and we do not even know when. And Hungarians don’t have many compatriots abroad.
After the fall of PLL LOT, several thousand people will lose their jobs. The carrier itself employs 2,000 people (in 2013 – 3,100 employees), and another several thousand subsidiaries. For many of them, it is the main customer (yes, it is, for example, in the case of LOT AMS, servicing planes of our national carrier).
The network of connections, also of Eurolot, would be poorer. Unfortunately, the connections beyond Wielka Woda would be closed. These would be taken over by Luthansa, who operated these flights from Berlin. The effects will be painful for regional ports; Rzeszów and Lublin. While connections in Europe will be taken over by low-cost airlines, there is no good substitute for flights to the USA. Ticket prices will increase by 10-20%. Our country will plunge into parochialism even more, and the decline of the economy will worsen.
The sale of the State Treasury’s property is nothing more than the introduction of a strategy to destroy and sell LOT Polish Airlines at the lowest cost. The possible collapse of the company is not beneficial not only for reasons of economic and prestigious strategies, but also for reasons of national security. This must be remembered.
It should be remembered that ten years ago, the company prospered well and was able to cope with the difficult market of air carriers. LOT Polish Airlines was the flagship company representing our country on all continents of the world. The disappearance of PLL LOT air carriers from the map will not only be an economic loss, but also a prestigious one for Poland.
There is one more, overlooked aspect of the functioning of LOT Polish Airlines. During the times of the Polish People’s Republic, the company became a perfect screen for the agency’s activities. PHZs (foreign trade enterprises) have long since collapsed. Therefore, there are few such entities left where you can locate agents (residents) well.
What was bankruptcy like for others?
The consequences of the bankruptcy of the Belgian Sabena, which collapsed in 2001 as the first European national carrier, were dramatic. This resulted in the loss of 7,500 jobs, in the airline itself and in the companies serving it, and above all in Belgium’s largest airport Zaventem in Brussels, which was its main airport. Founded on the ruins of Sabena, SN Brussels Airlines, belonging to the Lufthansa group, received a bridge loan from the Belgian government to restore connections to major European cities.
The second national airline to fail was the Greek Olympic Airways. The government tried to support her. A sister company was created that was not indebted and wanted to be privatized. However, the potential investor had to return EUR 700 million of public aid granted to the Greek carrier by the government, because the European Commission found this aid illegal. During the same period, Germany donated millions of euros to its failing companies and the aid was legal. In the end, Olympic Airlines managed to privatize, but it took several years.
In February 2012, the Hungarian Malev collapsed. The story of its fall is frightening and shows that in the European Union everyone cares about theirs. In 1993, the carrier was bought by the Italian Alitalia. Four years later, the Hungarian government bought the shares from her because the company was not regaining its condition.
Malev was privatized for the second time in 2007, when 99.95% of shares in the carrier were acquired by the AirBridge consortium, half owned by Boris Abramovich, the Moscow aviation tycoon. When Abramovich ran into financial trouble, his shares in AirBridge were taken over by the Moscow state bank WEB. A Moscow bank tried to sell Malev to Aeroflot, but the deal failed.
Malev will come back, so under the control of the Hungarian government. The government then had to subsidize the company.The direct cause of Malev’s bankruptcy in February 2012 was that the European Commission found the government aid amounting to EUR 285 million (granted in 2007-2010) illegal for this line and ordered its return. The company owed 205 million euros in debt. The bankruptcy happened overnight, resulting in a lot of chaos and thousands of passengers with no-fly tickets. In the first month after Malev’s bankruptcy, passenger traffic at the Budapest airport decreased by as much as 25%. It took a year to reach the same number of passengers. Wizzair and Ryanair filled the gap. Tickets went up by 10-15%. In addition, the airport in Budapest is no longer a transfer airport to eastern destinations (Sofia, Tirana, Skopje, Split, Dubrovnik, Pristina, Podgorica, Romanian Cluj Napoca, Ukrainian Odessa or Sarajevo). Today’s Budapest airport has the rank of a provincial airport. The Hungarians have lost what they had been building for so many decades. The Hungarian scenario is possible for PLL LOT.
Strengths of PLL LOT.
In 2013, PLL LOT has the youngest fleet in the world. Luxurious Boeing 787 Deamliner, good B.737 and a whole family of modern Embraer airplanes. These machines burn the least fuel. The maintenance costs are also low, as they are performed less frequently. They offer high travel comfort. No carrier in Europe, and perhaps in the world, has such a fleet. The Boeing 787 Deamliner burns up to 20% less fuel. It flies at higher altitudes and therefore faster. The trip to New York is 45 minutes shorter compared to the Boeing 767.
LOT Polish Airlines earns the most on long-haul, intercontinental and business class connections. The new premium class is to make the transport offer even more attractive. For one trip (out and back) to New York, profits increased by an average of 20% more than with the B 767.
In September 2011, LOT Polish Airlines was once again awarded the title of the best airline in Central and Eastern Europe. The Polish carrier received this award from the readers of the British magazine "Business Traveler". The award ceremony was held in London at the Kensington’s Royal Garden Hotel. The winners of the award were selected by the readers of the magazine, who voted in a special poll for airlines that meet the highest standards of customer service. The Polish carrier received the first prize of this magazine in 1998. In previous years, passengers and readers of foreign travel magazines also appreciated the level of services provided by the Polish airline. This is evidenced by, inter alia, Global Traveler, American Business Traveler and Reader’s Digest awards.
In 2012, our carrier increased the punctuality and regularity of flights. So much so that in terms of punctuality it took the first half of 2012. – according to the data of the European Airlines Association (AEA – Association of European Airlines) – first place in Europe.
Since April 2012, aircraft occupancy has been higher than the European average of 75%. In the Star Alliance, associating 28 airlines, this year (2012) only two of them met 100% of the requirements of this organization – LOT Polish Airlines and the Japanese ANA (All Nippon Airways).
Our carrier’s strength is the crew. Highly qualified specialists with many years of experience. Pilots and technicians are excellent. The company transports passengers very safely. We would like to remind you that since 1987, no passenger using LOT Polish Airlines services has died, and both the 80-year disasters were the fault of the Russians. Captain Tadeusz Wrona brought the B 767 without a chassis in such a way that many passengers spoke; – "that, however, the chassis came out." And it will not affect the harassment of this wonderful pilot that he did not turn on the fuse. Harassment by people who have Moscow schools and agents in their CVs.
In 2013, LOT Polish Airlines had 36 planes, 413 pilots and 640 on-board staff (flight attendants and flight attendants). In total, it is 30 people on one plane. Compared to other airlines, LOT Polish Airlines does not look bad. At Lufthansa, there are 16 pilots and more than 60 flight attendants per aircraft, which is more than twice as many. In addition, earnings in German airlines are three times higher than in LOT Polish Airlines. In terms of labor costs, LOT is quite decent. At the same time, the media was unable to cover the strikes of pilots at Lufthansa (April 2014) who demanded better wages.
Summary.
The condition of LOT Polish Airlines is poor. But it does not depend on the company itself. LOT Polish Airlines, like no other company, is dependent on the policy implemented by the Government of the Republic of Poland. The current government of the Republic of Poland, led by Prime Minister Donald Tusk, is extremely efficient. He carries out the orders of foreign agents and oligarchs with great zeal. He listens to the rulers of Berlin and Moscow. In the past, the communists raised their breasts to medals, Prime Minister Donald Tusk puts his back on tapping. Although he also received some orders, which are probably a disgrace to him, in relation to the nation.
Only, Prime Minister Donald Tusk, with his platform (from which he killed Jan Maria Rokita and Maciej Płażyński), is not hearing the nation. One day the wind of history will blow him away and he will never be buried in Wawel. Because under his rule we lost as much as a war front had swept through us. The problem, however, is that the change of power alone will do nothing. Behind us is the lack of vetting and decommunization.
We sincerely wish PLL LOT to survive.
Written by Karol Placha Hetman