LOT to team up with Estonia’s Nordica
LOT Polish Airlines announced it intends to forge a cooperation with its Estonian counterpart, Nordica. Polish national airline will take up 49 percent of shares in Nordica’s subsidiary – Regional Jet. Both companies count on fruitful cooperation and synergy befits.
In recent months, Poland’s flag carrier has been rapidly expanding its flight network. This year, the company launched over 20 new routes, including such long-distance destinations like Seoul and Tokyo. Next year, LOT’s planes will, for the first time in history, fly to Los Angeles and Newark.
The purchase will open even more possibilities for network expansion and an enlarged fleet. According to the information revealed to the media, Regional Jet routes will be labelled as LOT flights. Still, both parties to the deal stress they want both carriers to remain their national identities.
Two Regional Jet’s planes will soon fly on routes from Warsaw, while one of LOT planes will be used for connections from Estonia’s capital, Tallin, to Munich in Germany. Nordica’s destination network includes such European cities as Brussels, Amsterdam, Oslo, and Kiev. The companies will expand their flight networks and increase the frequency of the flights.
Rafał Milczarski, CEO of LOT, believes that thanks to the cooperation LOT will strengthen its presence on the market. He noted that “airlines from our region are not condemned to be subordinate to the great players from Western Europe, to lose their national identities and limit their scope of operations. In fact, quite to the contrary”.
Just a few years ago, Polish airlines experienced harsh financial difficulties and had to undergo restructuring. The situation was so severe the company had to turn to the government for support. It appears state aid brought some good results. Today, the company is gaining profits. The recently announced purchase of shares is to be financed from its current assets.
LOT’s home port, Warsaw’s Okęcie, is more popular than ever. According to the latest figures, last October it hosted over one million of passengers, over 20 percent more than a year before. From January 2016, over 10 million people started or ended their journey at the airport.
LOT Polish Airlines is in almost 100 percent owned by the Polish state. The same situation goes for Nordica in Estonia. After the share sale, LOT as a minority shareholder will have a representative in Regional Jet’s management board and supervisory body. The transaction will take place by the end of the year.
