Poland’s LOT loses out at last minute in bid to buy largest Czech airline Smartwings

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Notes from Poland is run by a small editorial team and is published by an independent, non-profit foundation that is funded through donations from our readers. We cannot do what we do without your support.

Polish flag carrier LOT’s widely expected move to buy Smartwings, the Czech Republic’s largest airline, has collapsed after a last-minute twist that instead saw Turkey’s Pegasus Airlines seal a €154 million deal for its Czech counterpart.

Media reports in Poland last week had suggested that LOT was in the process of finalising the purchase of Smartwings. The financial news service Money.pl reported that the Polish government was even preparing a press conference on Monday to announce the deal.

However, on Sunday, news began to emerge that LOT had lost out to Turkish rival Pegasus, which had bid €10 million more, according to the Rzeczpospolita daily. It reportedly put in the new offer on Sunday and gave the Czechs just hours to make a decision.

Early on Monday morning, Pegasus announced that it had indeed signed an agreement to buy Smartwings, saying that it was “opening a new chapter in our growth journey”. Jiří Šimáně, the co-founder of Smartwings, said that his company was “confident that Pegasus Airlines represents the ideal shareholder”.

LOT has been looking to expand in recent years, especially as it prepares to become the lead airline operating at a new “mega-airport” being built near Warsaw, which is intended to become a major regional hub.

A particular advantage of the potential takeover for LOT was access to Smartwings’ fleet of 112 aircraft, as well as its extensive networks of routes in the region.

Commenting on the collapse of the deal, Michał Leman, former marketing and product director at LOT, told Money.pl that it was “a pity” it had not gone through.

“Smartwings has a fairly good medium-haul fleet, with over 40 Boeing 737 MAX 8 aircraft, which LOT needs,” said Leman. “It also has contracts with tour operators and access to pilots and cabin crew from the Czech Republic and the region, providing an additional boost to further develop [LOT’s] charter offerings.”

Adrian Furgalski, president of ZDG TOR, an advisory firm specialising in transport, likewise told Money.pl that the purchase of Smartwings “would have been useful for us in terms of building a LOT hub at the CPK”, referring to Poland’s planned new airport.

The deal marks the second time in recent years that LOT has failed in efforts to acquire a smaller regional rival. In 2020, during the early stages of the pandemic, it pulled out of a move to buy German airline Condor.

Leman said that the collapse of the Smartwings deal “looks more like frivolous behaviour by the current owner of Smartwings, because, considering the level of preparation for communication regarding the takeover, LOT was confident in its offer”.

Notes from Poland is run by a small editorial team and published by an independent, non-profit foundation that is funded through donations from our readers. We cannot do what we do without your support.

Main image credit: Anna Zvereva/Wikimedia Commons (under CC BY-SA 2.0)

Daniel Tilles

Daniel Tilles is editor-in-chief of Notes from Poland. He has written on Polish affairs for a wide range of publications, including Foreign Policy, POLITICO Europe, EUobserver and Dziennik Gazeta Prawna.