Friday, 23 May 2014

LOT Polish Airlines CEO is high on Dreamliner for long-term growth

You wanna talk Boeing 787 Dreamliner? There may not be a better person equipped, so to speak, to do that than LOT Polish Airlines CEO Sebastian Mikosz.

The LOT CEO came to Chicago today to talk up the new plane, as well as LOT's experience with it and the Dreamliner's place in the Polish carrier's long-term growth plans.

LOT had the distinction of being the first European carrier to operate the Boeing Dreamliner. Except in the early going it turned out not to be such a distinction.

On the very night LOT was to inaugurate Dreamliner service between Chicago's O'Hare Airport and Warsaw, Poland in January 2013, the Federal Aviation Administration famously grounded the plane because of concerns about the lithium-ion batteries on board. LOT's new Dreamliner never took off for Warsaw that fateful night.

LOT wound up having to wait four more months to begin Dreamliner service between Chicago and Warsaw. But now, a year later, the Dreamliner finally is living up to the pre-launch hype, according to Mikosz.

And more importantly, the Dreamliner has become the cornerstone of LOT's strategy for long-term growth. If there's a drawback to the plane at this early juncture, Mikosz said, it's the absence of spare parts at every airport to which LOT flies. But that's because the Dreamliner is still so new. "I think within a year, every airport should have what we need," added Mikosz.

LOT was once the butt of jokes as an Eastern European carrier that was operating in what seemed the Dark Ages as other international carriers made enhancements in service and added new aircraft to woo high-margin business travelers.

But LOT is quickly gaining ground under Mikosz, a former executive with Arthur Andersen based in Paris, France, who about a year ago came aboard for a second term of duty as LOT's top guy.

The carrier had been operating deeply in the red since 2008 as most of Europe suffered through a nasty recession. But Mikosz has overseen a restructuring in the past year at LOT that produced a slim profit in 2013 — a huge plus for a carrier that is more than 93 percent owned by the Polish government.

Aside from transforming LOT into a leaner, more disciplined airline, Mikosz has focused on showcasing the Dreamliner and a much more sophisticated onboard experience than LOT was known for delivering for most of its 85-year history.

Flight attendants are sporting spiffier uniforms, and the business class clientele — from whom the carrier derives a disproportionately large part of its revenue — are now getting a four-course restaurant-style meal service that aims to put LOT in a class with some of its more-evolved competition. Main meals in business class are now a four-course affair that includes a choice of soup, appetizer, entree and cheese and sweets for dessert.

But Mikosz is especially proud of the espresso machines LOT has put on board its six Dreamliners. "They are not as expensive as an airplane engine, but they do cost quite a lot," said Mikosz, rolling his eyes and smiling a bit.

Mikosz figures the cost is worth it if the machines create the proper impression in the minds of big ticket travelers that LOT is upgrading.

A marketing-minded guy, Mikosz also has introduced new advertising to show off some of the many destinations that LOT serves via connections through Warsaw. Marketing pieces for the Polish carrier now ask the alluring question: "Have you lived the dream yet with the new LOT?"

Chicago is an extremely important market to LOT, as it is the international destination with the highest traffic to Warsaw. LOT carried 160,000 passengers between Chicago and Warsaw in 2013, and 28 percent of those traveled beyond Warsaw to other destinations in LOT's route system.

Mikosz wants LOT and Warsaw'a newly-upgraded and expanded hub airport to be a destination for travelers who prefer to avoid making connections in more congested European hubs such as London, Frankfurt and Copenhagen.

And Mikosz is counting on the Dreamliner to be a hugely compelling reason for business travelers to start thinking more often about LOT.

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