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Thomas Cook bankruptcy: Condor needs millions - urgently

2019-09-23T10:34:53.026Z


After the Thomas Cook bankruptcy, a second case Air Berlin is on the way: Condor needs a lot of money from the federal government to maintain the operation. The prospects are bad.



The insolvency of the British tour operator Thomas Cook also brings the federal government under pressure. Because after the collapse of the tourist group, the German subsidiary Condor asserted that the operation would be maintained.

But is it realistic that the holiday airline founded in 1955 can just keep on flying? Condor needs money, urgently. The federal government should step in for that. According to SPIEGEL information, a request for a loan has been made in the Ministry of Economic Affairs.

It opens around the Thomas Cook debacle, a second case Air Berlin. Air Berlin needed to bankruptcy also urgently money and got a rescue loan from the federal government in the amount of 150 million euros. So the company could continue to fly first. The repayment of interest in the amount of 27 million euros is still pending, but is advised.

It is quite possible that the federal government will also help the Condor financially, following the motto: one can not pay in one case and not in the other. According to the law, the Federal Government may help the holiday flier, if it makes economic sense and gives an opportunity to continue the company. Whether this is true is being tested in the Berlin government. A decision should be made later in the day.

Taxpayers have to pay either way

Industry circles say that Lufthansa is preparing to retrieve German tourists. But their own machines are well booked. A loan for Condor could help to keep the airline at least until all tourists are back home. Because for the Rückholaktion the taxpayer would have one way or another - he would probably pay for an alternative return action, such as by the Bundeswehr.

The flight attendant union Ufo is already sounding the alarm. The policy should be "listened to" when Condor needs support at the federal or state level. It would not be good for Germany as a business location for various reasons, if the Condor were to be torn into bankruptcy. "Above all, it would not be necessary, since the Condor by itself can exist well and the Lufthansa Group at least since the insolvency of Air Berlin in a nearly dominant position in Germany," it says in a statement UFO, the MIRROR is available in advance. Ver.di also demands the granting of a bridging loan.

Video: Thomas Cook stops all business

Video

Luke MacGregor / REUTERS

In fact, the Condor, unlike the British parent company, was not bad. It generates profits and was even able to lend to Thomas Cook. But now a new era will begin for the company. More than half of Condor's business accounts for travel agents. Thomas Cook is the client, other organizers could also be reluctant to buy seats at the Condor.

Partly obsolete fleet

On Monday, Condor said that, for legal reasons, tourists traveling with Thomas Cook organizers should not be brought to their destination. The rest of the business alongside with organizers consists of individual travelers who book individual tickets. Here, too, the booking situation will probably be worse if passengers have to calculate that their flight could no longer take place.

Does the Condor still have a long-term perspective beyond its role as a holiday home pick-up service? In the past few months, the Thomas Cook leadership had tried to sell the holiday fliers. Lufthansa had also looked into the books, but turned away with horror. The partially outdated fleet consisting of, among other things, Boeing 757 and Boeing 767 aircraft is maintenance-intensive and would urgently require replacement. But the mother did not have the money for that.

Who buys the Condor, so would have to invest heavily and keep the company with additional millions in the air as the Lufthansa did at the Air Berlin bankruptcy with their daughter Niki. The landed in the end after an intervention from Brussels but then at Ryanair. It is unlikely that Lufthansa will do this a second time.

Bad prospects for airline customers

More likely is another scenario: In a Condor bankruptcy, the slots, ie the start and landing time windows, including attractive long-haul routes to tourist destinations, would be distributed among all competitors. Lufthansa could come here in parts to the train. The insolvency administrator would have to take care of the legacies, including the obsolete fleet.

For customers, this would mean a further shortage of supply with higher prices as well as after the bankruptcy of Air Berlin. Condor also flies to destinations that other airlines do not serve. Part of this could be eliminated in the event of bankruptcy and it would be questionable whether other companies are closing this gap. The supremacy of low-cost airlines Ryanair, Easyjet and especially the Lufthansa subsidiary Eurowings should be further cemented.

  • Read here the reconstruction of the bankruptcy of Air Berlin

Lufthansa is playing a key role in the future of the Condor. Her subsidiary Lufthansa Technik is awaiting the Condor machines, which until 2009 at least partially belonged to the group. It repairs and overhauls the partially aged jets of the small competitor only in advance, which is common in such cases. With that she might be able to deliver the last coffin nail to the end of the Condor.

How fragile the situation of the holiday flier has been for some time, despite the profits generated, shows a collective agreement, the Lufthansa in 2016 with the cabin union UFO completed. In it, the ex-mother agrees to hire preferred Condor staff as cabin crew, should it come to the company to mass layoffs; an extremely rare example of caring for a competitor. The agreement should now present the UFO of Lufthansa, if it should come to the utmost in the Condor.

Source: spiegel

All business articles on 2019-09-23

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