LOT Polish Airlines Picks Boeing For Narrow-Body Plane Fleet

By Martin M. Sobczyk

WARSAW--LOT Polish Airlines said on Thursday it would lease up to 15 Boeing Co. (BA) single-aisle planes from Air Lease Corp. (AL), marking the second contract that Warsaw has awarded U.S. aerospace companies over European rival Airbus Group SE (AIR.FR) in as many weeks.

The state-owned carrier said it would take delivery of two latest-generation 737 Max 8 and four 737-800 NG airplanes next year, with the rest of the deliveries expected by 2020.

The jetliner deal follows Poland's decision to buy military helicopters from Lockheed Martin Corp. earlier this month after abandoning a tentative $3.5 billion deal to buy 50 Caracal helicopters made by Airbus.

LOT Chief Executive Rafal Milczarski on Thursday said leasing Boeing planes was the cheapest option, "not emotional or political," and that the timing of the announcement, soon after the government's decision to reject the Airbus helicopter deal, was a coincidence.

Mr. Milczarski said the move offers synergies with LOT's existing 737-400 aircraft and allows the company to more easily train pilots to fly the newer planes. Since the early 1990s, LOT has preferred Boeing aircraft for its long-haul as well as narrow-body fleet. Expanding LOT's fleet comes as the airline seeks to grow back its business after nearly going bankrupt in 2008 and 2012.

Airbus, in response to Thursday's announcement, said its A320 neo model would have been a better choice for the Polish airline.

LOT said it would increase the number of flights operated to major European airports and Tel Aviv, and that it was working on adding flights from its hub in Warsaw to Tehran and Astana.

Rescued with Polish tax money in 2012, LOT said it would make between 150 million zlotys and 200 million zlotys ($38.5 million to $51.3 million) in operating profit this year. The airline expects to grow its fleet to some 70 aircraft in 2020 from 45 this year.

Write to Martin Sobczyk at [e-mail]

(END) Dow Jones Newswires

October 13, 2016 09:32 ET (13:32 GMT)

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