Restructuring programme leads the way toward privatisation (238 words)

Published: 3/8/2001

Lithuanian Airlines (LAL), currently preparing for privatisation, is looking for a new head. It has advertised for suitably qualified individuals and intends to make a decision within one month, according to local media reports. The decision to find a new CEO was taken in mid February, after poor preliminary figures for 2000 indicated losses of $5m, despite a revenue increase of 15% over the period. The airline's owner, the Lithuanian State Property Fund, responded to the poor figures, by making changes in the entity's Board, with the Deputy Minister of Transport, Kazimieras Savinis, taking the Chair. While the Ministry of Transport holds four out of the five seats on LAL's board, the property fund will make the decision regarding the new CEO. Since the changes at the top in January, the incumbent General Director, Kestutis Auryla, has run the airline. The new CEO however, will have to deal with a number of problems there, though some restructuring of the airline was started in the latter part of 2000, with routes being cut and the representative offices closed. The property fund's major challenge will be to persuade an international airline of LAL's ability to turn good traffic growth into profits and to persuade them to take a 49% strategic stake. To date, a number of airlines have been mentioned as possible partners, with KLM being the front-runner. During February , LAL has seen a 13.5% increase in passengers following the 16% increase in January, with load factors improving by 5.7% to 42.9% during the month.

Article ID: 2399