Turkish Airlines makes a decision with regards to LOT Polish Airlines
The Turkish Airlines Board of Directors some time ago decided to look at the privatization process being undertaken by LOT Polish Airlines. The Executive Committee was asked to look at the commercial potential of an investment by THY in the Polish airline. A process was then put in motion to examine the idea.
Therefore since January 2012, Turkish Airlines officials in both Poland and Turkey have been involved in a series of interviews and discussions with officials from LOT. LOT agreed to and signed a confidentiality agreement in early March as the preliminary investigation began. Along with the airline, all affiliated concerns were included in the scope of this study; with technical, commercial, financial and legal aspects also evaluated and the results presented the Board of Directors of Turkish Airlines.
Specifically, the Board of Directors of Turkish Airlines was charged to evaluate a new growth strategy involving acquisition, as opposed to the internal growth model that has been pursued thus far. In order for a change in strategy to be approved, the Board needed assurance that this type of investment would involve a viable fit and supply Turkish Airlines with an improved and sustainable competitive advantage, while at the same time providing new horizons for the implementation of an altered game plan and business model. Over the past 10 years, Turkish Airlines has been very successful in developing a worldwide network and product under the current management and growth plan. While new possibilities are always welcomed to implement future growth, due diligence is vital before a major change is undertaken.
It was decided that Europe's long-established airlines, operating under the commercial and strategic rules of the European Union, have foreign ownership and management restrictions, as well as overlapping administrative structures that would inhibit maximization of THY’s shareholder value and would not bring the medium-to long-term growth that was initially envisioned. As a result, the Turkish Airlines Board of Directors has decided to terminate work on participation in the privatization process of LOT Polish Airlines.
Turkish Airlines will however continue to look at other strategic opportunities for medium-to long-term growth as investment opportunities arise.
fonte: Turkish Airlines
