Turkey's national carrier has backed out of a deal to purchase a majority stake in LOT, Poland's flagship airline, it has been announced.
Turkish Airlines backed out of talks with the Polish state carrier as the purchase would make a âlimited contributionâ to the company's medium- and long-term plans, a statement from Turkish Airlines to the Istanbul Stock Exchange reads, as quoted by the Reuters news agency.
However, unofficial sources hint to the sale being dropped because of EU law, which does not allow for companies from outside the 27-nation bloc to acquire more than a 50 percent share in an airline based in the EU.
Spokeswoman for the State Treasury Ministry, Magdalena Kobos told journalists on Friday that after receiving formal notice from Turkish Airlines about the withdrawal, âwe will return to talks with other partners who have declared an interest in LOT.â
LOT's situation may not change in the coming future, however, as sources close to the Treasury Ministry have told Polish Radio that no other airline is interested in securing a deal with the ailing Polish carrier, which noted a 145.5 million zloty (36 million euro) loss in 2011.
Chairman of LOT, Marcin Pirog told Polish Radio that the Turkish withdrawal âcomplicates mattersâ, although the executive board is to concentrate on securing the airline's financial position.
âThe better the financial condition the company finds itself in, the more attractive it will be as a partner,â Pirog told Polish Radio while on a visit to Beijing, where LOT has started to fly after a number of years.
If not Turkey, then maybe China?
On Thursday, Deputy Treasury Minister Rafal Baniak met with the Chairman of Air China, with hopes voiced that the airline, based in Beijing, was interested in the privatisation of LOT.
The meeting came after last year's agreement between the airlines concerning flights between Warsaw and Beijing which resulted in a code-share deal.
However, anonymous sources close to Air China told Polish Radio that privatisation talks took place only once, and that âthat is too little to warrant talks concerning any interest of Air China to purchase LOT.â
LOT Polish Airlines is majority owned by the State Treasury (67.97 percent). Although the airline has recorded losses in the past two years, the company forecasts profits reaching 52.5 million zloty (around 12 million euro) in 2012.