Today Lufthansa’s CEO announced that the company would be making an offer for Condor, Thomas Cook’s German airline. Included in the announcement was an option to acquire the remaining airlines of the Thomas Cook Group as well. This news is particularly timely as today is the deadline set by Thomas Cook for non-binding offers, according to FlightGlobal. Apparently, IAG and Indigo partners are also interested.
Condor would join the Lufthansa Group family which already includes SWISS and Austrian Airlines. The group also includes Eurowings, Germanwings, Eurowings Europe and Brussels Airlines. At the Lufthansa annual general meeting in Bonn this morning, Chairman and CEO of Lufthansa, Carsten Spohr provided details on his reasoning behind the offer:
“We decided yesterday in the meeting of the management board to bid for all of Condor with the option to be able to extend this (bid) to all Thomas Cook airlines…We believe that we can offer Condor good prospects and maintain the business as a whole, both long- and short-haul operations.”
About Condor and Thomas Cook
According to the Condor website, the airline has been flying its passengers to “the most beautiful destinations in the world since 1956.” Their fleet of 94 consists of Boeing 767-300ER and Boeing 757-300 aircraft as well as Airbus A320, A321, and A330 aircraft.
The leisure airline departs from cities all over Germany including Frankfurt, Munich, Düsseldorf and Hamburg. Their destinations include cities across the United States and Canada as well as in Namibia, Brazil, Egypt, and Malaysia. While a large portion of their destinations and routes are seasonal, the total number of routes is over 80.
Thomas Cook Group defines itself as a leisure airline company. In addition to Condor, it’s family of airlines include Thomas Cook UK, Thomas Cook Scandinavia, as well as Thomas Cook Balearics – the group’s subsidiary based in Palma de Mallorca. According to the Thomas Cook Group website, the entire company flies more than 19 million customers to 120 destinations annually, generating revenues of over four billion euros.
Investors and shareholders in Thomas Cook Group are clearly supportive of this deal. The company’s share price jumped 10% upon hearing the news.
Lufthansa expansion elsewhere
It was only three and a half years ago that Lufthansa acquired Belgian carrier Brussels Airlines. Looking back to news of the deal, the Lufthansa CEO’s comments at the time were clearly indicative of his strategy:
“I’m convinced we will see a lot more consolidation in years to come, the strong ones will get stronger and bigger”
Earlier this year we found out that Lufthansa Group was interested in buying Italian flag-carrier Alitalia. This move would be a last-resort for the Italian airline. Lufthansa’s strict conditions for purchase include significant job cuts and limited influence from the Italian government.
Early last month we also heard rumors of Lufthansa’s interest in collapsed airline Jet Airways. However, there is very little information about the sources providing this news.
What do you think of this possible deal? Will it reduce competition and ultimately lead to higher fares for passengers? Is this a good move for the industry to provide more stability as other airlines collapse?