Poland moves to sell troubled flagship airline LOT

Poland moved Tuesday towards privatising its national airline LOT as the government proposed legislation that would allow for the sale of a majority stake in the cash-strapped carrier. "There is no doubt that if we don't want to keep funnelling public funds into this bottomless pit, privatisation remains the only realistic option," Prime Minister Donald Tusk told a press conference in Warsaw. LOT ended 2012 with an operating loss of 115 million zloty (28 million euros, $36 million), instead of a forecast profit of 52.5 million zloty. In December, it received the first slice of a billion-zloty rescue package, prompting the European Union to determine whether Warsaw broke subsidy rules when it threw LOT a lifeline. The airline last month sent government officials a restructuring plan that must be presented to the European Commission for approval. The troubled company had pegged its hopes on the Boeing 787 Dreamliner -- becoming the first in Europe to use the plane -- but the plan was thwarted when Dreamliners were grounded in January because of battery problems. LOT had ordered eight Dreamliners to update its fleet of 35 planes, but the two it has already received are expected to remain grounded until October. Poland owns 67.97 percent of the airline, which employed 2,063 people at the end of last year. The national treasury has been required until now to maintain at least a 51 percent stake in the carrier, which announced in February that it would axe 500 jobs, or a quarter of its total workforce. "Now, when buying the firm, an investor will be able to decide its future on their own," Treasury Minister Mikolaj Budzanowski said in a statement. He added that the government wants LOT to maintain its brand and its hub in Warsaw, where the airline accounts for 45 percent of passenger traffic. Under European regulations, Poland can allow non-European companies to acquire only minority stakes in strategic companies like airlines. LOT was sold to Swissair in 1999, but the company went bust and Poland re-acquired the shares. Last year, non-EU carrier Turkish Airlines expressed an interest in LOT but wound up dropping plans to buy it after deeming that the acquisition would contribute little to its targets.