Turkish budget carrier Pegasus Airlines is set to acquire Czech Airlines and its low-cost operator Smartwings in a €154 million ($180 million) transaction.

Smartwings’ shareholders have been holding partnership talks for several years, notably with Israeli leisure carrier Israir.

But Israir withdrew from the process earlier this year having engaged in negotiations at least since 2022.

Polish flag-carrier LOT had also been viewed as a possible candidate for a Smartwings acquisition, but recently declined to confirm any interest.

Pegasus Airlines says it has signed an agreement to acquire Czech Airlines, which was the former flag-carrier of the Czech Republic.

Czech Airlines was taken over in 2018 by the leisure company Travel Service of which Smartwings was a budget airline brand.

The flag-carrier underwent extensive re-organisation after filing for insolvency in 2021 during the Covid-19 pandemic.

Smartwings subsequently became the carrier responsible for flight operations, including those of Czech Airlines, which effectively ceased to exist as a carrier although its CSA brand was retained for the holding company.

Pegasus Airlines says its “strategic investment” in the company – still subject to regulatory clearance – will strengthen its presence in Europe.

Based at Istanbul’s Sabiha Gokcen airport, it already operates to 158 destinations while Prague-based Smartwings has a network of 80.

Pegasus’s fleet of 127 aircraft is primarily based on the Airbus A320neo family – although it is planning to expand with Boeing 737 Max 10s – while Smartwings has around 47 jets, mainly the 737 Max and 737-800, as well as Airbus A220s originally delivered to Czech Airlines.

“A shared vision has emerged with Czech Airlines and Smartwings management,” says Pegasus chief executive Guliz Ozturk.

“We aim to spread our wings across Europe with two distinctive brands, Smartwings and Pegasus Airlines.

“This integration is not just about growth, but about creating resilient, technology-driven companies that put safety at the heart of operations and are prepared to meet the future to deliver easy, personalised and efficient travel experiences.”

Pegasus adds that the acquisition aims to combine the “experience and resources of both carriers” to create an organisation “ready for the future”, offering passengers “a wider network and affordable fares”.

Smartwings co-founder Jiri Simane says the budget airline was built with “limited financial resources” and “without the external support that most airlines typically receive from their respective governments”.

But Simane says the shareholders have opted to transfer the carrier to a partner that has the potential to strengthen and expand its operations.

“We are confident that Pegasus Airlines represents the ideal shareholder for Czech Airlines and Smartwings, one that will bring millions of passengers across its network new benefits, enhanced connectivity, and a continued joy of travel,” he says.