Poland's troubled LOT airline picks new president

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Associated Press

Posted on February 6, 2013 at 11:30 AM

Updated Wednesday, Feb 6 at 11:30 AM

WARSAW, Poland (AP) — The supervisory board of LOT airlines, Poland's struggling state-owned airline, has chosen a new president, Sebastian Mikosz, a former company head from 2009 to 2010.

The move Wednesday comes as the airline struggles with massive debt that raises questions about its survival. In December, the government, which owns 68 percent of the airline, gave 400 million zlotys ($130 million) in loans to the company, a sum LOT says is only the first part of an aid package needed for its total restructuring.

In exchange for the money, former CEO Marcin Pirog was forced out by the government, which believes the airline has been mismanaged. The government has also warned the airline that it can't rely on state support indefinitely.

LOT has been badly hit by competition from budget airlines and high fuel prices. It recently also faced problems with two brand-new Boeing 787 "Dreamliners," which had to be grounded due to investigations worldwide into the plane's lithium ion batteries.

LOT had counted on the Dreamliners to help it appeal to customers and was the first European airline to take delivery of the aircraft.

During his previous stint as company head, Mikosz carried out restructuring that involved cutting 400 jobs in a workforce of about 3,500 and cut various worker benefits. The airline currently has 2,000 employees.

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