Failed deal

Condor seeks state aid after LOT pullout

Setback for Condor: Polish aviation group PGL is withdrawing from planned takeover of the leisure carrier.
Condor
Setback for Condor: Polish aviation group PGL is withdrawing from planned takeover of the leisure carrier.

German leisure airline Condor is again seeking state support after Polish carrier LOT pulled out of an ambitious takeover deal for the former Thomas Cook Group airline.

LOT’s parent company PGL had planned to make Condor into the core of a new leisure flights business in Germany and neighbouring markets. But this strategy has been destroyed by the dramatic effects of the coronavirus crisis on airlines worldwide.

The Polish aviation group informed Condor on Monday (April 13) that it would not go ahead with the acquisition deal that was agreed in January. LOT is in severe financial difficulties and its entire fleet has been grounded due to the Covid-19 pandemic.

Bridging loans due to repaid this week

PGL had planned to invest enough so that Condor could fully pay back bridging loans of €380 million made by the German government and the Hessen regional government last autumn to finance the carrier through the weak winter season. This sum should normally be repaid this week, although that now looks impossible.

As a result, Condor again needs state financial support to prevent its collapse. The airline quickly confirmed on Monday that it was in talks with officials about possible state aid due to the effects of the coronavirus crisis on its business. Most of Condor’s 4,900 staff are already on short-term working arrangements.

An airline spokesperson told German media that Condor was "not unprepared" for the collapse of the LOT deal and was "in advanced discussions" with the German government.

Trade unions call for government support

On Tuesday, both the German pilots union Vereinigung Cockpit and the UFO union, which represents cabin staff, called on the German government to take a financial stake in the airline to secure its short-term future.

Condor, with turnover of €1.7 billion in 2018/19, carried around 9.4 million passengers last year. It has a fleet of 50 planes.

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