Turkish Airlines in Talks with LOT

Monika Trappmann, Industry Analyst for the Aerospace and Defence sector at global consultancy firm Frost & Sullivan, has offered her views on the recent announcement that Turkish Airlines is considering reinitiating acquisition talks with Polish carrier LOT.
Ms Trappmann believes that the acquisition may not be easy to pursue, explaining that LOT is:  “a designated EU [European Union] carrier and enjoys full air freedoms in operating within the trading bloc, while benefiting from existing EU bilateral agreements with non-EU countries.”
She warns that the carrier is obliged to meet EU regulations which include restrictions of majority ownership and control of shares by non-EU investors.
Currently 68% of LOT shares are owned by the Polish government, and Turkish Airlines could acquire up to 49% of all shares by buying this stake.  However, this would make the Turkish carrier the largest shareholder and give it indirect control of LOT.
To appease EU regulations, Ms Trappmann suggests that Turkish Airlines buys a part of the government’s current shareholding, making it the second largest shareholder.  “Although that is enough for Turkish Airlines to build capacity in Warsaw as a European hub, it does little in influencing the much-needed restructuring of LOT,” she says.