Israir to Submit Smartwings Transaction Proposal to Chinese Shareholder

Originally published on Airways

The Israir Group, which owns Israeli carrier Israir (6H), has submitted its transaction proposals for the Chinese shareholding of Czech carrier Smartwings (QS), which Israir is pursuing an acquisition of. The Israeli carrier is keen to expand its presence in Europe. In July 2022, Israir announced its plan to acquire QS in a filing with the Tel Aviv Stock Exchange. 

Smartwings, which is a low-cost leisure airline based in the Czech Republic, was founded in 1997 under the name Travel Service and in 2004 launched the brand Smartwings which has subsidiaries in Poland, Hungry, and Slovakia. Furthermore, it also has a 30% stake in the Czech Republic flag carrier Czech Airline (OK).

Smartwings operates a fleet of 34 Boeing 737s, including -700s, -800s, and -8s. Most of the fleet comprises 737-800s, of which QS currently operates 23 examples. The leisure carrier serves destinations across Europe, Africa, and the Middle East.

Smartwings OK-SWA Boeing 737-8 MAX. Photo: Alberto Cucini/Airways

The backdrop of the Proposal

Smartwings is majority owned by Czech businessmen Jiří Šimáň and Roman Vik, who own 50.1% of the company. The remaining 49.92% stake is owned by the state-owned Chinese investment company CITIC. However, there has been tension between shareholders and CITIC after CITIC failed to deliver on promises of financial investment. 

According to the Israir Group, CITIC has invited the group to bid, adhering to regulatory requirements. 6H must submit its newest proposal to take control of Smartwings by June 27th. It will also have to place an initial US$535,000 deposit on behalf of the Chinese shareholders. Smartwings board has already permitted CITIC to sell its stake to 6H. 

In July 2022, 6H first presented its offer to buy QS from the Chinese shareholder, which would give it a European air operator’s certificate. In a filing to the Tel Aviv Stock Exchange, 6H stated that it would pay between €20m and €30m for the leisure carrier and then, in November, submitted its final bid of US$43.7m (€44m) for QS. 

Based at Tel Aviv Ben Gurion International Airport (LBG), 6H operates a fleet of six Airbus A320 aircraft and serves destinations across Europe and the Middle East. 

Smartwings and 6H are already familiar with each other as they have worked together in the past. In addition, to a codeshare agreement, QS has leased 6H multiple aircraft over the past few years. Most recently, in November 2021, QS provided 6H with ACMI services on multiple Boeing 737-800s during peak travel season for the Israeli carrier.