State aid: Commission temporarily approves rescue aid for LOT Polish Airlines

The European Commission has concluded that a rescue loan of PLN 400 million (around €100 million) granted by the Polish government to LOT Polish Airlines was in line with EU state aid rules. The Commission found, in particular, that the aid was limited in time and scope. The Commission has approved the measure temporarily, until it can take a position on the restructuring plan to be submitted by Poland by 20 June 2013 (i.e. within six months from implementation of the measure).
Poland granted a short-term loan to LOT to enable it to pay creditors and maintain operating activities pending the implementation of a restructuring plan.
The Commission found the measure to be in line with its guidelines on the rescue and restructuring of companies in difficulties (see MEMO/04/172). In particular, the aid amount is limited to what is needed to keep the company in business over the next six months. Moreover, the Polish authorities have committed to submit a restructuring plan aimed at ensuring the future viability of LOT.
Background
LOT is the Polish national flag carrier, employing approximately 2,200 people, and operating a fleet of 47 planes. In recent years the company has experienced financial difficulties. It has reported losses since 2008 and faced increasing liquidity problems as the sources of funding used so far (e.g. sale of assets) have been exhausted. In November 2012, the Commission concluded that the sales of three of LOT's subsidiaries to State-owned entities did not involve state aid (see IP/12/1243).