Over the weekend, it broke that Middle Eastern behemoth Turkish Airlines was in negotiations to acquire a controlling stake in Poland’s national carrier, LOT Polish Airlines.
Hamdi Topcu, Turkish chairman, said: “We are starting negotiations to buy LOT. It should be a win-win situation for both sides.”
LOT operates a fleet of 56 aircraft to 92 destinations around the globe, losing $17.2 million in 2010. They have had their recent struggles, and the Polish government is now looking to offload its 68% stake. LOT’s largest hub is in Warsaw, and they have positioned themselves as a low-end transit hub with moderate success.
Meanwhile, Turkish Airlines’ name has come up as a suitor for numerous troubled European carriers in the past year and a half or so, most notably Barcelona based Spanair.
Turkish has been actively seeking a reliever for their central hub in Istanbul, which is congested and rapidly approaching its max carrying capacity with no apparent expansion possible. However, Warsaw is not a great airport to relieve Istanbul with, so there’s probably something else behind this deal.
According to Topucu, Turkish’s continued growth and profitability [$189.3 million in 2010] had led to “13 or 14 airlines” approaching it for investment.
“We have worked on [acquisitions] for more than a year and have chosen LOT.”
With India’s government moving towards allowing 49% foreign direct investment in India’s airlines, would Turkish Airlines be interested in purchasing a large stake in an Indian carrier?
There are certainly opportunities to be had in one of the world’s fastest growing markets and the steady hand of Turkish Airlines would be beneficial to India’s struggling airline management.
The question then arises, which airline would THY look to invest in and why? Share your thoughts via a comment.