Polish airline may float in 2005

LOT hopes to make a small profit this year

LOT, Poland's national airline, could float on the country's stock market early next year, the company has said.

The Polish government, which owns 68% of the airline's shares, has been looking to sell its stake for some time through a flotation.

Despite carrying a record number of passengers in 2003 and joining the Star Alliance international network, the airline made a substantial loss.

LOT, which began flying in 1929, flies to 48 foreign destinations.

Extra funds

The airline said it was in talks with the government about a possible flotation.

"The debut could be made in the spring of 2005," chief executive Marek Grabarek was reported as saying by Polish news agency PAP.

"We are in talks with the Treasury Ministry and decisions regarding extra funds for financing are likely to be made this year."

The Polish government is keen to offload its stake in LOT as part of a privatisation drive designed to raise much needed funds for its cash-strapped budget.

LOT carried more than three-and-a-half-million passengers last year, flying to 12 Polish cities and 48 foreign destinations.

Increasing competition

However, the airline made a 48m zlotych loss(£7.5m) as its scheduled and charter businesses were badly affected by the Iraq war and the Sars outbreak.

Following extensive cost-cutting, the airline hopes to make a small profit in 2004.

LOT is facing increasing competition.

Budget airline Air Polonia launched last December, offering flights from Poland to nine European cities.

Easyjet is among other airlines which now fly to Poland.

Swiss International Air Lines, which replaced collapsed national carrier Swissair, still owns a 25% stake in LOT.

The remaining 9% of the airline is owned by staff.