When Sebastian Mikosz resigned as CEO of LOT Polish Airlines almost three years ago, the airline appeared to be beyond rescue. Mikosz was fed up with politicians and union leaders interfering in what he believed was a necessary deep restructuring. But now he is back and not only plans to turn around the airline, but finally to sell it.

“I wanted to finish the job,” says Mikosz, who has been an investment banker since leaving LOT. He was brought back by Prime Minister Donald Tusk because the government became impatient with the airline and its never-ending losses. Poland is prepared to help out one last time but has also made clear that this time it is serious in preparing for its eventual exit.

Poland has been trying to privatize LOT for more than a decade, but potential investors have been less than enthusiastic not only because of the airline's poor state, but because the government wanted to retain effective control. “The privatization case has not been very compelling,” says Mikosz. That has now changed, as a new law allowing private majority ownership in LOT will take effect this week. Whoever wants to buy the airline will be able to make and implement decisions.

But an eventual sale depends on a lot of factors. Most importantly, Poland is seeking permission from the European Commission for a $300 million rescue package for LOT. The government already issued an emergency $125 million loan last December to keep the airline flying. That opened up the door for Mikosz a second time. Poland was looking for someone to resolve the LOT situation once and for all.

A lot of the ground work is underway. Mikosz is implementing a severe cost- and capacity-cutting program that eliminates almost 1,000 jobs at the airline and reduces available seat kilometers (ASK) by 20%. LOT is retiring sub-fleets such as the Embraer ERJ 145 or the Embraer 170 that are both regarded as too small. A Polish newspaper reports that LOT plans to lease out two of its eight incoming Boeing 787s, although the airline has not confirmed that.

The 787s play a key role in LOT's restructuring by allowing the airline to reduce unit costs in the long-haul segment, which is important because of the intense yield pressure it faces on short-haul routes. LOT is replacing its aging Boeing 767s as the 787s are delivered. Three have arrived and two more are due by the end of August.

Mikosz is convinced that there is enough demand to fill the long-haul fleet. He points out that Warsaw is expected to double in size over the next 10 years and Polish air travel to triple over the next 20 years, as more and more people can afford it.

But some are still skeptical about LOT's plans. One senior industry executive with knowledge of the situation argues that the long-haul fleet is too big because growth of a city does not necessarily lead to air transport expansion in that particular market. In his opinion, LOT will need a lot of feed from secondary markets to fill the aircraft, and it will compete with much bigger and more attractive airlines in these markets. In other words, it will be difficult to fly the 787s profitably, he asserts.

Mikosz, by contrast, projects that the airline will post its first operating profit after six years in 2014 and a net profit in 2015.

A quick turnaround will be crucial if LOT wants to succeed with its privatization plans. “People are not looking to buy airlines,” Mikosz concedes. “The process has to make industrial sense.” But for whom?

The big three carriers in Europe all seem preoccupied with their own issues. International Airlines Group is trying to make Iberia profitable again and integrating Vueling. Air France-KLM is dealing with Air France's structural weaknesses and may, if at all, look at increasing its 25% stake in Alitalia eventually. And Lufthansa has repeatedly made clear that, following the acquisitions of Swiss, Austrian and Brussels airlines, it is looking beyond Europe for merger activities.

“Of course, a European investor would be easiest for us, but if they are not ready, I cannot wait,” says Mikosz. One potential investor, which has been aggressively buying into foreign carriers, is Etihad Airways. Etihad owns a 27% stake in Air Berlin (and bought a majority of its frequent-flier program) and 24% of Indian carrier Jet Airways, among others. Qatar Airways has also made an attempt to buy into European airlines, having temporarily acquired a minority stake in Cargolux, but it has since pulled out.

Last month, Korean Air bought a 44% stake in CSA Czech Airlines. Following several failed privatization attempts, Malev Hungarian Airlines was forced to shut down in early 2012. Spanair, controlled by the Catalonian regional government, went bankrupt after Qatar Airways pulled back from a bid to take over a large stake in the airline.

LOT itself was once partially owned by the former Swiss SAir Group. But following its shareholder's bankruptcy in 2001, that minority stake was picked up by a trustee and has since reverted to government control.