I agree with the sentiments of some here that LO will not go under. The government simply will not let it. Its a Poilsh mentality that has nothing to do with common sense or good business.

On the other hand, should it go under? Probably.
Should the management be fired and new people hired that are not cronies of the political system (whichever way it may blow at the time), absolutely.
I think this has started with hiring of a new CEO (Mikosz), the 9th in 4 years.

LOT has to deal with bad hedging, falling loads, overstaffing, the unions, inefficiency. And of great importance is also the delays of the 787 that they were supposed to have been the launch customer of this year.

Another problem is that the 67.9% that the government holds may actually be hard to off-load, there isnt exactly a lineup of investors pushing to buy those shares from the government.


To me, the final signal that something is seriously wrong is the fact that the bread and butter transatlantics have stopped being profitable. For decades, LOT has gouged the Polish community in North America with high prices and inferior product (ancient 767s!). They had the advantage of direct flights and having a strong position with "ethnic" travel agents.

On the European market, there is an overabundance of LCCs in Poland, that werent there, even as recently as 5 years ago.

Some stats for you to consider:
% of market share in Poland
2008 -- 2007

LOT - 28.02% -- 31.52%
Wizz - 19.24% -- 16.06%
Ryanair - 16.17% -- 13.42%
LH - 6.07% -- 5.21%

overall the Polish market grew by 3.6% in 2008. The only airline to lose market share was LOT.
Add all the other issues, and its a bankruptcy waiting to happen...