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updated: 6/24/2013 11:16 AM

Boeing to compensate Polish airline for 787s

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Associated Press

WARSAW, Poland -- Boeing will offer compensation to Poland's national airline for the months-long grounding of its 787 planes, a Polish government official said Monday.

The world's fleet of 50 Boeing 787s was grounded in January after batteries smoldered on two planes owned by two Japanese airlines. Two among the grounded planes were owned by Poland's LOT airline. They have all resumed flying since Boeing fitted all 787s with redesigned batteries.

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Deputy Treasury Minister Rafal Baniak said that the grounding of LOT's planes, which lasted until June, had cost over 100 million zlotys ($ 30 million) in lost business alone. Among other costs, LOT had to extend the lease on its 767s to carry out scheduled flights.

Talking to Radio PiN, Baniak would not estimate the total cost of the grounding, but said Boeing promised to make a compensation offer in July.

The manufacturer is still trying to identify the root cause of the battery problem.

LOT currently has four 787 planes, dubbed "Dreamliner" by Boeing. It took delivery of another two since the grounding was announced and is due to receive one more next year.

The carrier is struggling financially and had hoped that the fuel-efficient aircraft would improve its earnings.

Meanwhile, the airline has asked the European Commission's approval for its restructuring and development plan that calls for layoffs and some 380 million zlotys ($ 110 million) in government aid.

If the Commission determines that the government aid hinders competition, it can demand concessions from the company.

Last year, with the EU Commission's conditional consent, LOT received 400 million zlotys in government aid that helped it pay old debts.

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