Airbus nears landmark jet deal with Poland's LOT, sources say

By Tim Hepher and Joanna Plucinska

PARIS (Reuters) -European planemaker Airbus is nearing a deal to sell A220 passenger jets to Polish carrier LOT after a hard-fought and politically charged contest with Brazilian planemaker Embraer, industry sources said.

Barring a last-minute upset, a deal for around 40 of the Airbus regional jets could be finalised as early as Monday’s opening of the Paris Airshow, they added, speaking on condition of anonymity due to the sensitivity of the matter.

"We do not comment on rumours," an Airbus spokesperson said.

LOT and Embraer also declined to comment.

On Saturday, the PAP news agency quoted Polish infrastructure minister Dariusz Klimczak as saying that he would visit the show.

"And we will announce on Monday afternoon, together with the president of LOT, the results of the tender procedure for the purchase of the fleet for LOT, long awaited," he said.

Poland has been looking for a total of 80 or more regional jets, about half of which would be purchase options, to expand and build its Central Communication Port by the early 2030s while also growing its central Warsaw Chopin airport hub.

The purchase of the planes would help fuel that expansion, LOT Chief Executive Michal Fijol has told Polish media.

The competition has attracted strong political attention as Warsaw weighs its economic and political alliances amid concerns about security support from the U.S., a major defence supplier, according to multiple European aviation and defence sources.

Poland's pro-European coalition government won a vote of confidence on Wednesday, an outcome that Prime Minister Donald Tusk hopes will give his cabinet new momentum after it was shaken by a setback in the presidential election.

In May, France and Poland signed a treaty to increase cooperation on defence, nuclear energy and other measures, in a sign of growing alliances between European nations.

In a series of overlapping civil and defence discussions, Airbus is also aiming to supply A400M transporters and A330 MRTT tankers.

Embraer has expressed interest in supplying its KC-390 airlifter to Poland, offering to open an assembly line there as part of a wider deal involving its E2 passenger planes.

The head of Embraer's commercial division, Arjan Meijer, said in a recent Polish newspaper interview that the company's E2 jet was the best choice for LOT and that Embraer's commercial offer to the airline should be the basis for discussions.

Poland is one of the few hubs in Europe with space to build out its airport infrastructure, but government-sponsored plans for such an expansion have dragged for years.

National carrier LOT has struggled to compete with budget carriers Ryanair and Wizz Air for market share.

(Additional reporting by Karol Badohal, Editing by Richard Lough and Alison Williams)