By Chris Borowski
WARSAW | Wed Dec 12, 2012 12:45pm EST
WARSAW Dec 12 (Reuters) - Poland called on flag carrier LOT to fire its chief executive after the airline turned to the government for at least 400 million zlotys ($127 million) in state aid to avoid bankruptcy.
Treasury Minister Mikolaj Budzanowski, who oversees state assets, said that while he looked favourably at the request, LOT should dismiss Chief Executive Marcin Pirog who had previously maintained the company was in good condition.
"The chief executive is personally responsible for the state of the company," Budzanowski told a news conference. "He managed the company and oversaw a restructuring process that was not conducted in a proper manner over the last two years."
Budzanowski said LOT was seeking a total of several hundred million zlotys in state assistance, including a first tranche of 400 million zlotys. Some local media reported the carrier was looking to receive more than 1 billion zlotys.
Poland will need permission from the European Commission before any funds are transferred.
In January, Hungary's Malev stopped flying soon after the European Union's executive arm forced the carrier to repay aid worth hundreds of millions of euros.
LOT, in which the state directly and indirectly owns a 93 percent stake, has lost 2.8 billion zlotys in the last 12 years and has had 10 chief executives.
The Polish airline has been hurt by cut-throat competition from no frills competitors such as Ryanair and easyJet , along with high fuel prices and depressed demand due to Europe's economic troubles.
Its unions also accuse management of failing to adjust its strategy to the industry's new reality, including eliminating many loss-making routes.
With great fanfare, LOT last month took delivery of Boeing's Dreamliner 787, hoping the status of being the first European carrier to add the long delayed jet to its fleet could help boost its flagging fortunes.
The first of LOT's eight planned Dreamliners is scheduled to take off for its first commercial flight on Friday.
Local media have reported that LOT wants to dismiss some 600 employees, or about a third of its workforce, and reduce its network of flights by about third.
The airline, which was not immediately available for comment, has already sold assets and several units, including maintenance and catering, to help pay its bills and mounting debt payments.
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