WOOD Flash - Pegasus Airlines: signs an agreement to acquire Czech Airlines for EUR 154m

Pegasus has agreed to acquire Czech Airlines and its subsidiary, Smartwings, for EUR 154m (full equity). Subject to regulatory approval, the transaction could mark a new phase in Pegasus’s development as a group, with EU-domiciled airlines, offering a strategic foothold in Prague and, more broadly, across Europe. With over EUR 1.5bn in liquidity at end-September, the purchase price is manageable, while the deal provides access to an EU carrier generating around one-third of Pegasus’s revenues, and supports long-term fleet utilisation, including future Boeing deliveries. The acquisition could also diversify Pegasus’s exposure to Türkiye. In our view, the principal risk lies in execution: if the combination ends up being dilutive, it may prove difficult to disentangle. While Czech Airlines has experienced its fair share of financial difficulties in recent years, we understand that Smartwings is profitable, and should not dilute Pegasus’s margins significantly. Integration with Pegasus’s fleet procurement and leasing team could benefit the targets’ cost base. If Pegasus secures the required regulatory approvals, we expect the deal could close in mid-2026E.