LOT buys CONDOR
 

Strange times. Good news for the staff but seen the major salary differences between Condor and LOT I wonder who will go up and who will go down in the long term .

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.

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.

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 :cool:

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

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.

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/un...f-f7d80ab465c4

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

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.

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.

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.

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.

It is indeed and you are sadly correct.
If at all only LH will receive state funding or a gvt stake in ownership.

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.

Very true “less hair”

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.

Good solution. Exceptional times!

Looks to be more than rumour.

https://www.reuters.com/article/us-c...-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

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.

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

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.

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.

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.

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.

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.

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

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

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.

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.

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.

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.

https://www.air101.co.uk/2020/04/tho...p_Qwc.linkedin

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

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.

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

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.

They are out now.
https://www.reuters.com/article/heal...-idUSL5N2C12HW

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.