Lietuvos Oro Uostai (Lithuanian Airports), the operator of Vilnius Airport, says the new route is key to improving air connectivity to major financial centers and the image of Lithuania. The link is also expected to give a boost of the tourism, transport and service sectors.
LOT will operate a twice daily service between Vilnius and London City on weekdays and one daily flight on weekends during the summer season.
Lithuanian Transport and Communications Minister Rokas Masiulis has said the business community has been asking for the route for several years.
According to the minister, the route will be supported under a special aid mechanism, the first of its kind in Europe. It took two years for the government to convince the European Commission to allow Lithuania to apply such a mechanism.
The more seats are sold on each flight, the less it will cost the state, Masiulis said.
Economy and Innovation Minister Virginijus Sinkevicius has said that the maximum amount of state aid will not exceed 3 million euros annually.
Lietuvos Oro Uostai had sought to attract an airline to fly passengers to London City for several years. Last November, the state-owned company said it had awarded a five-contract to operate the service to LOT following a tender process.
Currently, flights from Lithuania's three international airports in Vilnius, Kaunas and Palanga are only operated by budget carriers -- Hungary's Wizz Air and Ireland's Ryanair.