Struggling leisure carrier Condor is being thrown a lifeline as European Commission regulators approve a €550 million (US$595 million) state-guaranteed loan from the German government. These much-needed funds will allow Condor to continue to fly, the airline said in a statement Monday.
Corona aid and bridge loan refinancing
In the lastest turn of events in the Condor saga, the leisure airline has been granted a boon by the powers that be. The European Commission has approved a bailout in the form of a loan of €294 million ($319 million) as corona aid, and €256 million ($278 million) to fully refinance the bridging loan the airline received last winter following the bankruptcy of Thomas Cook.
“As an operationally healthy and profitable company, Condor has gotten into trouble for the second time in almost half a year through no fault of its own – once by Thomas Cook and then by the effects of the corona pandemic,” said Ralf Teckentrup, CEO of Condor, in the statement.
Condor said it had applied for the guarantee to prevent liquidity bottlenecks caused by the immense impact of the corona pandemic on air traffic and to repay the existing loan.
Relief after PGL withdrawal
The relief-package is secured within the framework of the German government’s Corona Shield Program. Condor says it will allow the airline to secure operations after the Polish Aviation Group (PGL) pulled out of its planned acquisition of the carrier earlier this month.
PGL, the owner of LOT Polish Airlines, was planning (in fact, it had already signed agreements) to purchase Condor for €300 million ($325 million). This would have allowed the airline to repay the bridging loan provided by the federal government of Germany in the wake of the collapse of its parent company, travel group Thomas Cook, which took place September 2019.
Not sitting idly by
While one would think that travel bans to and from holiday destinations would see a leisure carrier parked entirely, this has not been the case for Condor. During the past two weeks, it has been delivering medical equipment, both in the belly and in the cabin of its aircraft. So far, it has brought over 23 million face masks, two million gloves, and hundreds of thousands of protective suits to Germany.
It has also been transporting numerous harvest workers from Romania to Germany to help farmers secure their harvest as there is a shortage of available seasonal workers for the fields. In addition, the airline has been operating repatriation flights in cooperation with the German government, bringing back over 78,000 stranded German residents from around the world.
How far do you think the European Union should go when it comes to states providing special financing for airlines? Should the Commission make it mandatory with corona aid relief packages? Who do you think could be a potential buyer for Condor in the future?