PGL’s new subsidiary is a carbon copy of LOT

Many Germans first heard the name Polska Grupa Lotnicza PGL on January 24, 2020, when the state-owned holding company of the Polish national airline LOT announced that it was taking over the German holiday airline Condor. By mid-April it was clear that the Poles would back out and not take over the airline.

After the uproar that PGL caused in Germany, it is now causing a stir in its home country, Poland. Earlier this week, the Pasazer portal noticed that PGL had founded a new subsidiary. The name: LOT Polish Airlines. The purpose of the company: air transport of passengers.

PGL denies bankruptcy speculation

When asked why the company had been set up, PGL explained that the new subsidiary would help to organise the operational activities. It also pointed out that it had a total of eight branches with the word ‘LOT’ in their names. Meanwhile, the state-owned company did not explain further what an organization of operational activities means.

Pasazer and other media speculated that the Polish state and PGL could plan a controlled bankruptcy of the current LOT, officially called Polskie Linie Lotnicze LOT. PGL denies this. Even Jacek Sasin, Minister of State Enterprise and Deputy Prime Minister, spoke out. He said that the survival of Lot would be ensured in any case, if necessary with a state financial injection. He had no time, according to Sasin, to contradict every false report that went around.

Potential advantages of a new company

Nevertheless, the Pasazer portal does not move away from its thesis and explained the reasons in a second article: Even before the Corona crisis, LOT was economically worse off than many of its competitors in Europe and with currently 15 Boeing 787, the long-haul fleet is too large and expensive. A radical solution such as controlled bankruptcy would therefore make many things easier, for example in dealing with leasing contracts and wage negotiations. The new Alitalia structure could serve as a model.