Czech regulator gives conditional nod to Pegasus takeover of Smartwings

Czech competition authorities have conditionally approved Pegasus Airlines' planned acquisition of Smartwings, the Turkish carrier's bid for the Czech airline group.

The Office for the Protection of Competition, or UOHS, said the clearance depends on commitments Pegasus offered to address its concerns, chiefly about the Prague-Antalya market. Pegasus has agreed to hand over a set of summer slots on that route to another carrier. According to UOHS vice-chair Kamil Nejezchleb, the commitment would let third-party competitors pick up slots suited to running direct scheduled flights between the two cities without delay.

The regulator said overlapping operations on Prague-Antalya would have left the combined company with a very large market share and a wide margin over its rivals. It also noted that no other carriers have entered that market, contrary to its earlier expectations, which could have led to a marked drop in competitive pressure.

Pegasus came forward as a bidder for CSA, the Czech holding company whose main asset is Smartwings, late last year. Before that, Israel's Israir Group had held a lengthy series of talks about a possible deal for Smartwings.

The airline's network is built mainly around Istanbul's Sabiha Gokcen airport and other Turkish cities, and includes scheduled Istanbul-Prague and Antalya-Prague services.

UOHS said it received a request to approve the CSA purchase in May. The approval does not yet stand as final, the regulator said, because the window for lodging an appeal has not closed.

Pegasus is a Turkish budget carrier.