LOT implements extraordinary solutions to survive COVID crisis

Leszek Szymański/PAP

Polish flag carrier PLL LOT is halting investments, lowering wages and negotiating with leasing companies to optimise aircraft contracts, as part of its measures to survive the crisis caused by the coronavirus pandemic, LOT spokesman Michal Czernicki has told PAP.

"COVID-19 has caused the greatest crisis in the over-100-year history of civil aviation," Czernicki said. "In order to survive it, we're implementing extraordinary solutions. Above all, investments which are not essential to the continuation of the company's activities have been frozen."

The national airline has withdrawn from exchanging its fleet of service vehicles for management staff and board members and halted the planned renovation and rebuilding of real estate, among other measures.

Another step the airline has taken is talks with aircraft lessors. Most of the craft in LOT's fleet are financed through leasing.

"An important element of the enterprise's fixed costs is aircraft leases," Czernicki explained. "Almost 80 percent of our aircraft are financed in this way. That's why we're conducting intensive talks with lessors to optimalise contracts and adapt them to the current situation in the sector. A review is also being carried out of company's administrative activities. Within the framework of this review, the directors will have the task of minimalising the indirect costs of activity."

The LOT spokesman gave his assurance that the airline wants to maintain the employment of its crews. New payment solutions cover 850 cabin staff and pilots employed on full-time contracts, as well as 1,700 members of flight personnel cooperating with LOT Crew and LOT Cabin Crew in a B2B formula - both companies belong to the LOT capital group.

Czernicki said most airlines in Europe are laying off staff, while LOT has agreed to pay a certain minimum number of flight hours although crew are grounded, though the hourly rate remains unchanged. In addition, starting from the second quarter, the bonus system for office staff and ground crews has been suspended.

He said a videoconference was held on Monday in which 1,300 people took part and during which crews were presented with the proposals and had their questions answered.

Czernicki went on to explain that the carrier's return to network connections would be done in stages. He said the company realised it may take some time to return to the operational situation preceding the crisis but that, as connections we reinstated, crews' flight hours would increase as would their pay.