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FOR Communication 30/2018: Polish Aviation Group: a twofold mystification paid for by the Reprivatisation Fund

  • When the public opinion focuses on yet another strike of employees of LOT Polish Airlines, few commentators analyze the state funded transformations of the carrier. On 10 October, LOT became officially part of the state-owned Polska Grupa Lotnicza (PGL, Polish Aviation Group), a holding to which assets of three other aviation companies were also transferred (LOT Aircraft Maintenance Services, LS Airport Services, and LS Technics).
  • The holding company was established to serve the grandiose plans of PiS government for the state carrier  - and combined with the creation of the Central Communication Port - is supposed to enable it to compete with the European giants.
  • According to the President of LOT, PGL is modeled on European aviation groups Lufthansa, Air France KLM, and IAG. This is a twofold mystification. It is a mystification both to maintain that a state juggernaut is no different from a private holding company, as well as to state that this holding will serve anything else than to create a closed system of state-owned companies, where some of them pay for the mistakes of others.
  • The PiS government capitalized PGL with PLN 1.2 billion from the Reprivatization Fund - yet another case of using the Fund contrary to its original purpose. In 2017, the government spent over PLN 2.1 billion of its money on the expansion of the state sector. In the same year, only 121 million zlotys were allocated to satisfy the claims of former owners, i.e., the original purpose of the Reprivatization Fund.


Marcin Zieliński, economist


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