LOT buys CONDOR [Archive]

diffident

25th Jan 2020, 12:11

I would think the deadline to repay the bridging loan coming up will have played a big part in this. That loan needs repaying in full, and Condor would simply not be in a position to repay it on its own. It was always going to be a case of Condor being swallowed up by someone, the question was always who??

I must admit, I didn't see LOT coming in and snapping it up. Unless, around the rest of the European big boys, there was not a lot of appetite for them? I would have thought TUI would be stamping out competition in that part of the market in the first instance by taking Condor on.

BEA 71

25th Jan 2020, 13:42

Of all the bidders the LOT Group is probably the best. And it is good news that Condor continues flying. If the EU watchdogs give their blessing. I see problems from another direction.The magic word is " National Pride ". Being taken over by a Polish company will be hard to swallow for many people. I do have Polish roots ( three generations
back ) and know that people are still " reserved " when they hear or read my name. The Condor of these days reflects the heritage of being a German airline, since my
first journey on a Condor Viscount in 1962 to a most recent trip on a Boeing 757 nothing has changed, the appearance - in a positive sense - is purely Lufthansa. There will be difficult times ahead, and I wish the " new " Condor and its employees good luck.

FougaMagister

2nd Feb 2020, 12:16

It's not a done deal yet; since LOT is part of the state-owned PGL, both Wizzair and Lufthansa have referred the deal to the European Commission. To be continued...

https://simpleflying.com/condor-lufthansa-cut-ties/

Cheers (https://Cheers) :cool:

BEA 71

2nd Feb 2020, 14:10

Yes, Fouga Magister, I fear that the deal is going to die there. It would not be the first time.

BRE

3rd Feb 2020, 11:25

Couples of months ago I read that Lufthansa, among others, took a hard look at their books and turned up their noses. Biggest issue seems to be fleet age.

foxcharliep2

11th Mar 2020, 11:33

Looks like the LOT buyout of Condor could be in danger of failing due to the current Corona situation according to German news today on the Spiegel.

PAG the parent company of LOT is in bad shape and says they could have bought Condor much cheaper.

Next negotation on buyout is tomorrow. The German Gvt. loan of 380€ mio. has to be paid back in April.

https://www.spiegel.de/wirtschaft/unternehmen/corona-krise-gefaehrdet-condor-rettung-a-1a3ac1d6-48fc-4fa1-9a5f-f7d80ab465c4

Tomasz

11th Mar 2020, 13:25

Wonder what kind of money would lot have to pay for breaking the transaction

Less Hair

12th Mar 2020, 12:47

Today the sale got formally approved by Condor's creditors. So they can leave their "Schutzschirmverfahren" (Chapter 11 style protection) as intended.

foxcharliep2

12th Mar 2020, 15:18

Today the sale got formally approved by Condor's creditors. So they can leave their "Schutzschirmverfahren" (Chapter 11 style protection) as intended.

Good news, thanks.

andrasz

13th Mar 2020, 14:41

Given the hit LOT is taking from cancellations and lack of demand, one does wonder if they will be able to cough up the cash to close the deal, even if it is approved by creditors.

Less Hair

26th Mar 2020, 18:04

It sounds like the whole deal might stall.
The Poles are said to have requested additional (full) german state guarantees for the takeover credit funding that the german government refused. While the deal had been reported to be inked already it might be in limbo now unfortunately. All the best to Condor's staff.

BEA 71

27th Mar 2020, 15:20

PAG ( LOT ) will drop the Condor deal like a hot potato. They now have problems of their own and the German government will not compromise. In the present situation, with so many jobs in danger, no one cares about the fate of a holiday airline, there are far bigger problems to be dealt with. It is sad.

foxcharliep2

27th Mar 2020, 16:59

Less Hair

27th Mar 2020, 17:25

Condor has had government support before. It looked like working to bridge the time and just keep them going.
The problem now even with more government money is to find some new investor at this time of chaos.

Altostratus

29th Mar 2020, 12:44

Very true “less hair”

Less Hair

1st Apr 2020, 13:23

Latest rumour: German government bank KfW will take over Condor making them a state owned carrier for some time. After some time a new sales process will be initiated. So they will not be state owned forever.

Pistonprop

1st Apr 2020, 15:06

Good solution. Exceptional times!

krismiler

1st Apr 2020, 15:37

Looks to be more than rumour.

https://www.reuters.com/article/us-condor-nationalisation-exclusive/exclusive-germany-ready-to-nationalize-airline-condor-sources-idUSKBN21J5F9

BERLIN/MUNICH (Reuters) - The German government stands ready to take over Condor as a deal for the airline to be bought by Polish rival LOT is likely to collapse in the industry turmoil caused by the coronavirus crisis, several people familiar with the matter told Reuters.

LOT agreed in January to buy Condor for about 300 million euros ($328 million) to create a leading European aviation group with more than 20 million passengers a year.

But with planes unable to fly because of travel restrictions, compounded by a plunge in demand over fears of contagion, airlines worldwide have grounded most of their fleets, and many have said they need government support to survive.

Last week, airlines urged governments to speed up bailouts to rescue the air transport industry, as they doubled their estimate of 2020 revenue losses from the health crisis to more than $250 billion.

LOT owner PGL has made completion of its takeover deal contingent on certain financial guarantees that the German government considers unacceptable, the sources said, adding no final decision on Condor’s immediate future had been taken.

“LOT has some issues with the deal financing”, one of the people said, while another said a government decision could come as early as this week.

Condor said it was in talks with all parties involved and no decision had been made yet, declining to comment further. PGL and the German economy ministry declined to comment.

Nationalising Condor would only be for a limited time as Germany aims to restart a sales process as soon as the stranglehold on the travel industry from the coronavirus pandemic has eased, the sources said.

Condor is a former unit of Thomas Cook, the holiday company that collapsed in September. A 380 million euro ($415 million) state bridging loan allowed the carrier to be rescued.

Last week, Condor applied for an additional 200 million euros in state aid in the wake of the coronavirus outbreak, according to people familiar with the matter.

Additional reporting by Arno Schuetze, Christian Kraemer und Anna Koper; Writing by Ludwig Burger; Editing by Mark Potter

BEA 71

2nd Apr 2020, 08:07

krismiller - There is a similar article in today´s Frankfurter Allgemeine ( one of the leading newspapers in the country ), right now Condor are needed ( and busy ) bringing stranded Germans back from all corners of the world, this on behalf of the government. a position which will go on for a while. Temporary ownership by the government is seriously considered, not to make them a state owned airline on the long run, but to sell it when the dust has settled.

RoyHudd

2nd Apr 2020, 08:34

Why are Condor needed when Lufthansa have a massive available capacity?

Less Hair

2nd Apr 2020, 09:32

After Air Berlin's and Germania's demise not much is left on the german market outside of the Lufthansa Group pool of airlines. Especially if you look to Frankfurt. This is why the government tries to keep separate players alive. TUI is another one.

Denti

2nd Apr 2020, 11:48

Why are Condor needed when Lufthansa have a massive available capacity?
Condor is not needed, it is given jobs at hugely overpriced premiums to keep it alive a few days longer. Simply said, Germany likes to display itself as being a free market society, but in the end it isn't. It is simply market distortion by keeping a carrier alive that has been in administration for months before Covid-19 even existed. But then, they were always on par with Italy in that regard.

lederhosen

2nd Apr 2020, 12:10

Thomas Cook Aviation a sister company to Condor has now gone into administration. Nobody really knows what the future holds. But you would have to be pretty optimistic to think that there will be much of a summer season for the charter operators. There may not be many German airlines left outside the LH group. But Easyjet and Ryanair employ a lot of German pilots and were certainly filling the space left by the demise of other operators.

txl

2nd Apr 2020, 21:09

Why are Condor needed when Lufthansa have a massive available capacity?

From a passengers point of view: Condor had a great product that was superior to Easy/Ryan/TUI and totally worth the premium if you were looking to get to a vacation destination that LH didn't serve. I always liked Condor, unfortunately they cut their routes from Berlin some time ago. Also flew Condor for business travel to the US once in Premium Eco.

EAM

3rd Apr 2020, 14:37

krismiller -Temporary ownership by the government is seriously considered, not to make them a state owned airline on the long run, but to sell it when the dust has settled.

Very unlikely, they already struggled to find someone to buy Condor last year, now who's gonna buy them after all this? Then as well, what about Thomas Cook Aviation, why will they not be taken over by the government, Sundair the same. Local business only get support if they haven't been in trouble before. Condor couldn't and still cannot survive on its own and the same rules have to be applied to everybody.
What about Vapiano? The government should take them too.

I am sorry for the guys, its no fun to loose a job in aviation right now, but I don't think Condor has an actual chance to survive.

foxcharliep2

3rd Apr 2020, 15:55

Very unlikely, they already struggled to find someone to buy Condor last year, now who's gonna buy them after all this? Then as well, what about Thomas Cook Aviation, why will they not be taken over by the government, Sundair the same. Local business only get support if they haven't been in trouble before. Condor couldn't and still cannot survive on its own and the same rules have to be applied to everybody.
What about Vapiano? The government should take them too.

I am sorry for the guys, its no fun to loose a job in aviation right now, but I don't think Condor has an actual chance to survive.

While Vapiano is a bad example - fast food chain - I agree with your comments regarding Condor as I see no practical solution for the company.
Just in the news now is that the German gvmt is in talks with Lufthansa for a rescue package or state stake.

safelife

3rd Apr 2020, 19:35

German state will take over Condor, then merge it with Lufthansa.
You read it here first.

Less Hair

3rd Apr 2020, 19:42

Possible. LH owned Condor for many years before TC and such.

EAM

3rd Apr 2020, 19:43

While Vapiano is a bad example - fast food chain -

Yes you are right, bad example, Vapiano has almost double the employees than Condor and all their restaurants are very modern and up to date, not like the fleet of Condor with their 25 year old 767s and an average fleet age of 20 years. ;-)

So who would invest in Condor after this crises and completely renew their fleet.

But after LTU disappeared, it would of course be very sad to see an other big name disappearing.

Less Hair

4th Apr 2020, 09:28

There seems to be enough travel demand in Germany for more than one airline. And given that Frankfurt airport is the country's biggest work location by headcount, even more than Volkswagen's Wolfsburg main site, it is understandable that the government tries to keep jobs there and assists with bridging loans and such.

Having said that it seems that stock minded companies don't keep enough reserves for bad times while happily paying dividends and boni to their management in good ones these days.

EAM

4th Apr 2020, 15:55

Seems to be correct, but germans don't want to spent lots of money on their vacation, or anything else, everything has to be cheap.
That is why Condor is in trouble instead of making lots of money, specially after AirBerlin went bust ,for the (almost) the same reason.

Less Hair

4th Apr 2020, 20:46

aerodestination

5th Apr 2020, 16:04

https://www.air101.co.uk/2020/04/thomas-cook-aviation-bankrupt-after.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+co%2FfMxO+%28Air101%29#.Xon2prp_Qwc.lin kedin

Thomas cook aviation consisted of about 15% of Condors fleet. Total of 6 aircraft and Condor has a total of 53.

One of the last vestigates of the Thomas Cook came crashing down this week when Condor - the German sideline of the group, rescued by Thomas Cooks German management cancelled its leasing deal with Thomas Cook Aviation.

Thomas Cook Aviation, based in Oberursel, Hesse, was formerly known as Air Berlin Aeronautics, a subsidiary Air Berlin, it became known as Air Berlin Aviation, until Air Berlin went bankrupt. It was rescued from the mire by the Thomas Cook Group in 2018. It flew a small fleet of six Airbus A320s and A321s all on behalf of Condor and sporting its livery.

The contract with Condor was in effect until the end of December 2021 and should have been safe, however, with the ongoing coronavirus COVID-19 crisis Condor was forced to ground most of its aircraft. It used its own fleet to operate limited repatriation flights, which left Thomas Cook Aviation's aircraft sitting on the ground, doing nothing other than costing Condor money. "For this reason, like many other airlines, we had to terminate the contract with the seasonal partner airline Thomas Cook Aviation, among other things, to reduce costs," a spokesperson for Condor said.

BEA 71

6th Apr 2020, 18:07

Not true. Most package holidays are now middle class priced and above. Look at Germany's wealthy retired crowd. Traveling like there is no tomorrow.

And they do spend quite a bit on new cars as well. They must be SUV's these days.
I belong to this retired crowd. But I am not wealthy. Most people of my age group have been working for 45 years, not only contributed to the state pension,often receive a
company pension, to which they also contributed. In addition the state has supported the building up of savings, People have life insurance which is paid out at retirement. In case that both, husband and wife, have worked, this builds up. The " wealthy " did not get it for free. But there is another very important factor - the majority of people live in rented appartements, and never had downpayments, and therefore were able to save money for their retirement. Money, they now spend. As for cheap travel - I
have just spent three days in Athens, and was lucky to book a discount fare with Aegean. For transportation and accomodation I spent almost 500 Euro, I do not consider this being cheap.

Less Hair

6th Apr 2020, 18:09

You seem to prove my point. Being able to spend money for travel.

txl

8th Apr 2020, 19:51

Latest news is that LOT – unsurprisingly – wants to drop out of the deal and is making demands now to step away in favour of a potential investor.

Less Hair

13th Apr 2020, 14:38

They are out now.
https://www.reuters.com/article/health-coronavirus-poland-condor/polands-lot-pulls-out-of-deal-to-buy-german-airline-condor-idUSL5N2C12HW

safelife

13th Apr 2020, 19:06

Government’s loan is due the day after tomorrow, so time to come up with a solution.
Probably going to be nationalized, at least temporary.

foxcharliep2

13th Apr 2020, 19:27

Government’s loan is due the day after tomorrow, so time to come up with a solution.
Probably going to be nationalized, at least temporary.

Yep, but that is just a stopgap. I don't see any interested investor in Condor and the gvmt is going to drop them like a hot potato.
They can only assure survival of the/one national airline.
Condor, as bad as it sounds, is not essential to Germany..
Hope I am wrong but it is what it is.

PS : An integration into LH structure might be a possibility so the gvmt saves an LH integrated Condor.

https://www.welt.de/wirtschaft/article207238035/Condor-Verkauf-geplatzt-offenbar-neue-deutsche-Interessenten.html

Big Tudor

13th Apr 2020, 19:46

PS : An integration into LH structure might be a possibility so the gvmt saves an LH integrated Condor.

Integration with LH would seem improbable given the cessation of Germanwings and the scaling back of the rest group.

BEA 71

14th Apr 2020, 08:41

Who will, in these times, book a flight on Condor ? There is too much uncertainty. Although being " a loyal customer " since 1962, I was reluctant on my last trip and booked another airline and another destination for a trip four weeks ago. At hindsight it was a good decision, it saved me some nerve-wrecking days ( and nights ) in Palma. These days, booking flights on any airline, is like playing Russian Roulette, Condor is no exception. Soon there will be the times for adventurers and fortune makers, who will try to gain from the situation.

easyJetCrew

14th Apr 2020, 09:13

Crazy times and this won't be the last! Good news for staff and for Condor to keep flying though.

Twitter

14th Apr 2020, 15:14

Crazy times and this won't be the last! Good news for staff and for Condor to keep flying though.

According Swiss radio deal is off -
due to some bug or other...

Fingers still crossed however.

ATC Watcher

14th Apr 2020, 19:42

report on German ARD 1 st TV channel tonight on future of Condor. From what i understood the current feeling is it will be taken over by a Trust backed up by the Government to access some blocked funds in order to make the debt repayment of 380 M Euros due this week. That should be enough to save the company during the Covid crisis , then when the crisis is over ,a new partner will be looked for...
https://www.tagesschau.de/multimedia/video/video-687863.html

Less Hair

15th Apr 2020, 09:37

Hard to imagine who might want to buy them now.

foxcharliep2

15th Apr 2020, 09:55

Hard to imagine who might want to buy them now.

Hard to imagine how they are going to survive at all when paying back the 380€ M bridge loan from the trust account and needing another 200€ M loan to do that.

BRE

15th Apr 2020, 10:27

Their main problem is an ancient fleet. A new partner would have to buy them newer aircraft. Maybe they will come more cheaply in the near future?

Less Hair

15th Apr 2020, 10:54

Unfortunately there will be many leases, used aircraft and new aircraft delivery slots available "for cheap" soon. This will be their smallest concern.
What they need is something like a travel group or cruise ship company with package travellers to be moved and money to spend. This will be truly hard to find these days.

EAM

15th Apr 2020, 14:17

Less Hair

15th Apr 2020, 16:56

True. And the retired crowd is still there.
I meant to be speaking about actual companies wanting to buy an airline these days.

ATC Watcher

15th Apr 2020, 18:15

Didn't you say there is a big group of wealthy retired people in Germany who want to spend money for their holidays? So that shouldn't be a problem, specially because pension is going up this summer. ;-)
Yes plenty of those in Germany , the small problem is that it is the same people that are the most vulnerable in case they get infected and are likely ( like in France) be those who will be locked down the longest., In addition getting stuck sick in another country is not exactly that appealing anymore to that age group. I also do not see Lufthansa , having just reduced significantly their fleet and closed down Germanwings taking them on board with their 25 years old 767s...
That said the Condor name is still a very valuable brand name in Germany and has a marketing value , so who knows.. But Pan Am also did had a very valuable brand name ( still has) and nobody rescued them at the time ..
Feel sorry for Condor staff , have plenty of good friends among them ...

foxcharliep2

15th Apr 2020, 19:03

Yes plenty of those in Germany , the small problem is that it is the same people that are the most vulnerable in case they get infected and are likely ( like in France) be those who will be locked down the longest., In addition getting stuck sick in another country is not exactly that appealing anymore to that age group. I also do not see Lufthansa , having just reduced significantly their fleet and closed down Germanwings taking them on board with their 25 years old 767s...
That said the Condor name is still a very valuable brand name in Germany and has a marketing value , so who knows.. But Pan Am also did had a very valuable brand name ( still has) and nobody rescued them at the time ..
Feel sorry for Condor staff , have plenty of good friends among them ...

Fully agree with you ATC Watcher.

The notion of "cruise ship" travel should be over for good after this crisis.
Virus super spreaders as it has been shown so far, specially for that age group..

Why LH would take over Condor is beyond me - the only useful bit as you correctly state is the name. Nothing else.

LH did save Pan Am Germany at a very high cost back in the days. It didn't contribute anything to the company but the landing rights in Berlin. Paid for at a very high price for political reasons.

I don't see a repeat here.

BEA 71

15th Apr 2020, 20:40

Didn't you say there is a big group of wealthy retired people in Germany who want to spend money for their holidays? So that shouldn't be a problem, specially because pension is going up this summer. ;-)

https://cimg6.ibsrv.net/gimg/pprune.org-vbulletin/1920x1043/14_apr_20_med__ac4f59bddbc9c923cb82d9c328f0c76501e3d59d.jpg

Retired people are more concerned about availability of medication than about future holidays these days. The question is how many of this age group will survive, and who. I don´t think all of us " old farts " will be around in three month´s time. And the rise in pension - well, it will be taken away again with the income tax. Like every year.

Denti

16th Apr 2020, 05:00

Well, that is actually macro economically not bad, a lot of free flats or houses and wealth handed down to the next generation...

foxcharliep2

16th Apr 2020, 14:04

Like any proper "divorce" both parties are now blaming each other now and demanding "compensation" for contract breach ...

And the bridge loan of 380€ M is due tomorrow. Now Condor is in talks for another loan and the deferral of the original loan.

https://www.n-tv.de/wirtschaft/Polen-wirft-Condor-Vertragsbruch-vor-article21718365.html

SamYeager

16th Apr 2020, 15:42

The notion of "cruise ship" travel should be over for good after this crisis.
Virus super spreaders as it has been shown so far, specially for that age group..

There was an article in one of the UK papers last weekend commenting about the enthusiastic booking of berths for next year so your assumption may be misplaced.

foxcharliep2

16th Apr 2020, 18:16

There was an article in one of the UK papers last weekend commenting about the enthusiastic booking of berths for next year so your assumption may be misplaced.

The Darwin Awards will be happy to accept new members.

ATC Watcher

16th Apr 2020, 18:55

There was an article in one of the UK papers last weekend commenting about the enthusiastic booking of berths for next year so your assumption may be misplaced.
Where the news is coming from and based on which data .? The spread of the virus in ships is apparently quite particular. Look at what happened in a couple of days on board the french aircraft carrier :https://www.bbc.com/news/world-europe-52308073
I think it might take a while for the cruise industry to get back where it was..

kiwi grey

17th Apr 2020, 02:16

There was an article in one of the UK papers last weekend commenting about the enthusiastic booking of berths for next year so your assumption may be misplaced.

Who paid for it to be published?
Were the comments about "enthusiastic booking" attributed to an identifiable person?

lederhosen

17th Apr 2020, 15:14

It is hard to imagine how this is going to have a happy ending. Maybe just maybe there will be business for A320s in the foreseeable future, probably Palma, Canaries and the eastern Med. Low fuel costs and a massive reduction in personnel might swing it. The name certainly has value despite Thomas Cook's calamitous attempts at rebranding, but a Condor reborn out of the ashes without any of the baggage from its previous existence is perhaps more likely. Germany has plenty of form in having charter airlines go bust, Aero Lloyd, Hamburg International, Air Berlin and Germania are just a few that spring to mind and that was when times were good. It all depends how long it takes for any kind of international tourism to restart. I am sure the Spanish will want incoming holiday makers just as soon as possible. But low cost hotels and high density charter flights would not seem the obvious starting point, unless corona parties become state strategy to kick off further waves of infection. I loved flying to Palma, sometimes twice in a day. I miss the view over the Alps in the early morning. But I cannot see myself back in that life any time soon.

foxcharliep2

17th Apr 2020, 18:57

But I cannot see myself back in that life any time soon.

Well said & good reflections Lederhosen. LG !

.

BEA 71

17th Apr 2020, 19:31

https://cimg7.ibsrv.net/gimg/pprune.org-vbulletin/1920x1441/muc_pmi_muc_a0fa12dc02abd288f3eceee49bdaec81286bb147.jpg

Lederhosen, I think this is what you are missing. I loved to go on the early morning flight, get to the Hotel in Palma by 9.30, drop my bags and head for Mercato Olivar for Tapas. Some years ago I gave up long haul travel and took shorter flights instead, with Palma being my favourite destination not only for the view of the Alps.
My first flight to PMI was on a Condor Viscount 814 ( 1962 ) followed by a trip via NCE on LH Super Constellation. Let´s hope for the best.