LOT about to make a move for Turkish Airlines ?
January 26, 2012
Shares in Turkish Airlines have risen amid speculation that the airline may be about to make a new move on Polish national carrier, LOT.
At the end of last year, CEO Temel Kotil said the Turkish flag-carrier was looking to invest in another airline. It made an attempt to buy into loss-making LOT two years ago.
Istanbul newspaper Hürriyet Daily News reported last week that Turkish was making an new bid for acquisition talks.
However, it is understood strong opposition has been voiced in Poland over the idea of foreign ownership, and analysts believe Turkish may hit problems with EU airline ownership rules.
One industry analyst said: “It is certainly a good sign for the Polish carrier’s future plans. However, the acquisition might not be so easy to pursue.
“Polish Airlines is a designated EU carrier and enjoys full air freedoms in operating within the trading bloc, while benefiting from existing EU bilateral agreements with non-EU countries.
“However, to keep this status, the carrier is obliged to meet EU regulations, including restrictions on majority ownership and control of its shares by non-EU investors.”
The analyst said that, in theory, Turkish could acquire up to 49% of all shares, making it the largest shareholder by some distance and giving it indirect control of LOT.
But she added: “The only scenario that satisfies EU regulations with no lengthy bureaucratic procedures, is the option of Turkish buying a part of the 68% government shareholding, which would make it the second largest shareholder.
“Although that is enough for Turkish to build capacity in Warsaw as a European hub, it does little in influencing the much-needed restructuring of LOT.”
She added that Turkish had announced its interest in acquiring other European carriers, outside the EU trading bloc.
Courtesy of IFW
