Takeover deal

Condor takes off for Europe with new Polish owner PGL

PGL chief Rafał Miczarski (centre left) and Condor CEO Ralf Teckentrup (centre right) welcome the deal.
Rita Münck
PGL chief Rafał Miczarski (centre left) and Condor CEO Ralf Teckentrup (centre right) welcome the deal.

Condor is heading for European expansion after LOT’s parent company PGL sealed a deal to take over Thomas Cook Group’s former German airline subsidiary.

The leisure airline looks set for much-needed investment in its ageing fleet and potential expansion to new markets such as Poland and Hungary following its acquisition by Polish Aviation Group (PGL), which was announced on Friday (January 24).

In future, Condor will become “the centre” of PGL’s leisure strategy with a focus on growth in Germany as well as “adjacent markets”. Condor will retain its current management team and continue to fly under its well-established own brand.

PGL beat off rival bids from US and UK financial investors after its offer was selected as “the most attractive for Condor, its employees, partners, suppliers and customers”. The price was not disclosed, however.

PGL’s investment will enable Condor to pay back fully 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 and keep it flying while a strategic investor was sought.

The takeover also ends months of uncertainty for Condor staff, customers and business partners following the insolvency of Thomas Cook Group last September. The transaction is expected to close by April 2020 once customary antitrust approvals are obtained and Condor exits the protective shield proceedings.

PGL chief Rafał Milczarski (who is also head of LOT) explained: “The acquisition of Condor fits perfectly into PGL’s strategy. It also secures the future of Condor and offers stability and great opportunities to its employees, customers and business partners. We want to develop Condor’s iconic brand in Germany and also introduce it to other markets in Europe. We wholeheartedly welcome all Condor employees to the PGL family and invite them to build together one of the greatest aviation groups in Europe.”

Condor CEO Ralf Teckentrup welcomed the new owner, saying: “We are pleased that Condor, Germany’s most popular leisure airline, has gained in PGL and LOT stable, experienced and dynamically developing partners who secure the future of our business. Together we will serve twice as many passengers, thus forming one of the largest aviation groups and the leading leisure airline group in Europe. Our partners and customers can safely plan their holiday flights with Condor.”

With the takeover, PGL will have some 20 million passengers and nearly double its 2019 turnover of €1.9 billion to €3.6 billion. LOT, with hubs in Warsaw and Budapest, flew 10 million travellers on a fleet of 80 aircraft to over 100 destinations in Europe and 18 overseas destinations last year. Condor, with turnover of €1.7 billion in 2018/19, flies around 9.4 million passengers on a fleet of 50 planes from eight German airports to around 90 holiday destinations in Europe, Africa and the Americas.

Outlining some of PGL’s plans for Condor, Milczarski said the German airline’s ageing 16 long-haul planes will be replaced over the coming three years and the intercontinental fleet will be expanded to 20 planes. LOT itself already operates 15 B787 Dreamliners.

Moreover, with LOT a core member of the Lufthansa-led Star Alliance, Condor’s long-standing commercial cooperation with Lufthansa looks secure. Condor long-haul passengers frequently fly on Lufthansa services from other German airports to Frankfurt, which is Condor’s main base for intercontinental flights.  

German tourism industry welcomes Condor takeover

Leading German tour operators who rely on Condor to fly customers to major holiday destinations, were quick to welcome the deal that will keep the German airline in business.

Sören Hartmann, CEO DER Touristik Group, said: “It’s a very good day for German holidaymakers and travel destinations. Condor will remain in the market as a very successful airline.” He emphasised that DER Touristik’s bookings for flights with Condor are ahead of last year, demonstrating solid consumer confidence in the airline.

Similarly, Willi Verhuven, owner of Alltours, commented: “We welcome the acquisition of Condor by LOT. Now the new owner is clear, we will continue to cooperate intensively with Condor and extend our cooperation.” This covered major destinations in southern Europe along with the Caribbean and other long-haul destinations, he said.