LOT Polish Airlines Nears Takeover of Czech Carrier Smartwings

LOT in Advanced Talks for Smartwings Acquisition

Poland's national flag carrier, LOT Polish Airlines, is reportedly in the final stages of negotiations to acquire Smartwings, the largest airline in the Czech Republic. This strategic move could significantly expand LOT's footprint in the Central European aviation market. Reports indicate that Michał Fijoł, CEO of LOT Polish Airlines, visited Prague in late October to discuss the terms of the potential takeover.

The proposed acquisition is currently under review by the Polish government, through the public holding company Polish Aviation Group, which is a major shareholder in LOT. If successful, this would mark LOT's first major expansion since its aborted bid for Germany's Condor Airlines in 2020, which was halted due to the onset of the COVID-19 pandemic.

Smartwings' Recent Ownership Shift and Market Position

Smartwings, a key player in the Czech aviation sector, recently underwent a significant ownership change. In February 2024, the airline became fully Czech-owned after the Chinese state-owned CITIC Group sold its 49.92% stake to the local company Prague City Air. The current owners, Jiří Šimáně and Roman Vik, are now exploring a partial or full sale of the airline.

Prior to this, Israeli airline Israir had been in discussions to acquire the Chinese stake but suspended negotiations due to geopolitical tensions in the Middle East. Smartwings, founded in 1997, operates both scheduled and charter flights, primarily serving leisure destinations, and holds a majority stake in CSA Czech Airlines.

Strategic Implications and Competitive Landscape

The potential takeover is expected to strengthen LOT's position in Central Europe, particularly within the lucrative tourism and short-haul leisure sectors where Smartwings has a robust presence. Analysts suggest the acquisition could provide LOT with access to Smartwings' fleet, which includes Boeing 737 MAX aircraft, and enhance its market presence in Czechia.

However, LOT is not the only airline interested in Smartwings. German budget carrier Eurowings and Turkish-German joint venture SunExpress are also reportedly among the final contenders for the acquisition, indicating a competitive bidding process.

Financial Health of Both Airlines

Both airlines have shown signs of recovery and growth. Smartwings doubled its revenues in 2022 to CZK 19.3 billion and reported a positive financial result of CZK 478 million. LOT Polish Airlines also demonstrated strong financial performance, reporting a net profit of PLN 688.5 million in 2024 and carrying a record 10.7 million passengers.

Despite the potential benefits, challenges such as the integration of the two companies and the possible impact on LOT's primary hub in Warsaw have been noted by industry experts.