The European Union's antitrust authority on Tuesday approved the Polish government's 200 million-euro ($270 million) bailout for its ailing national carrier, LOT airlines, AP reported.
The 28-nation bloc's executive Commission said the assistance does not violate EU rules limiting state aid to businesses since it will 'allow the company to become viable in the long-term without unduly distorting competition.'
Star Alliance member LOT has been in financial difficulty for several years. In May 2013, the EU approved a 100 million-euro government rescue loan in exchange for a restructuring plan meant to offset any competitive advantage. In the plan, the airline discontinued some profitable routes and reduced capacity to trim costs. Poland then proposed the 200 million-euro capital injection to help LOT regain its long-term viability by 2015.
EU antitrust chief Joaquin Almunia said LOT's 'restructuring plan should make it a viable company in the near future.'
The airline's CEO, Sebastian Mikosz, said it was a 'very important day for LOT.'
He said the restructuring plan ensured the airline's longer-term survival by cutting costs and improving revenues, allowing LOT to register a net profit in 2013 - the first in years.