beyondbrics

It looks like Lot, the Polish state-owned airline, may finally enter private hands.

Magdalena Kobos, a spokeswoman from the Polish treasury, told Bloomberg the government was in talks with two potential buyers: Turkish Airlines, Turkey’s national flag carrier, and a publicly listed company which was not named.

Poland is “interested in completing the negotiations and picking a strategic investor as quickly as possible,” Kobos said.

Lot carried about 5m passengers and posted a 52m zlotys ($15.3m) net loss in 2010. The situation in 2011 is unlikely to have improved – according to the FT in December, predictions of a 50m zlotys loss were looking optimistic.

But that hasn’t deterred Turkish Airlines, which made a near €250m loss in the first half of 2011 but is growing rapidly and expects to record a profit for the full year.

Hamdi Topçu, chairman of Turkish Airlines, said some 13 or 14 carriers had approached his company asking to be acquired, according to Hurriyet Daily News. “We have decided on Lot Airlines after analysing [the approaches],” he said.

The decision to sell Lot, one of the world’s oldest airlines, has not been without controversy in Poland. “It is difficult to buy out an airline that belongs to a state, but Polish officials are willing to privatize the firm despite some resistance among the Polish public”, Topçu said.

Lot decided to go private at the end of 2010, hiring an advisor to help decide whether to pursue a public offering or sell to a strategic partner. However, the process stalled last year as increasingly difficult economic conditions hit potential buyers.

Related reading:
Balcerowicz: Poland’s contstant economic thorn, beyondbrics
Turkish Airlines: ‘Europe’s favourite’ carrier steers a contrarian course, FT
State airlines set hub course for survival, FT