The European Commission has allowed Germany to give Condor (DE, Frankfurt International) a temporary loan of EUR380 million euros (USD423 million). The bridging loan will help the charter carrier to “avoid disruptions for passengers, without unduly distorting competition in the single market”, the commission said in a statement on October 14.
Germany had notified the commission about the grant, to be transferred via the German public development bank KfW, on September 25. Condor faces an acute liquidity shortage following the entry into liquidation of its parent Thomas Cook Group. It has also had to write off significant claims against other companies in the group that Condor will no longer be able to collect.
The airline, which is profitable, confirmed it would continue its operations, while German Economy Minister Peter Altmaier clarified that the decision meant that many of the company’s 5,000 employees would be able to keep their jobs.
“Condor is a profitable company and therefore our decision [to ask for the loan] was based on economic factors, not on political criteria,” Altmaier said.
The goal is for the company to undergo insolvency proceedings under self-administration, to avoid becoming tangled up in Thomas Cook’s financial affairs, Reuters reported. In this way, an investor could be found so that the state would get its money back.
In related news, Condor will not use long-haul aircraft from Canada's Air Transat (TS, Montréal Trudeau) this winter season as it has done in the past in a seasonal fleet swap agreement, the German carrier confirmed to ch-aviation in a statement.
"The seasonal exchange between Thomas Cook Airlines UK and Air Transat has ended. The agreement for the 2019/20 winter season envisaged that ten A321 aircraft from Thomas Cook Airlines UK would be deployed at Air Transat and, in turn, up to four A330-200s would be deployed in Europe. Of these, two to three should be used at Condor, among other things as ops reserve," it said.
"For the 19/20 winter timetable, Condor planned to deploy up to two Air Transat A330s in its flight programme, leaving the remaining capacity as operational reserve. Nevertheless, in order to broadly maintain the planned winter programme, Condor continues the successful cooperation with AirTanker (9L, Brize Norton), which has already flown an A330-200 for Condor in the summer 2019 timetable. Other flights previously planned for the Air Transat A330 will be rescheduled to operate with a Condor B767."
