German charter airline Condor has been granted EU Commission permission to accept German state aid bailout funding following the collapse of Thomas Cook.
Since the insolvency and liquidation of Thomas Cook Group in the UK, the future of its German arm, Condor Flugdienst has at times been far from certain. Unlike its British counterpart however, Condor continued to fly, and has in recent years operated as a profitable part of the wider company.
Condor Flugdienst’s CEO Ralf Teckentrup, said of the bailout decision; “We are very pleased that the European Commission has made such a timely and positive decision. The bridging loan is an important step towards securing Condor’s future.
“A healthy business like Condor is also in the interest of a properly operating market, because we are not only a significant competitor in the tourism sector, but also important for the competition in the German and European aviation industry.”
On the viability and support for Condor with the German public, Teckentrup added; “Our customers and business partners book additional quotas so that the current booking situation even suprasses our expectations. We are already in advanced discussions with all tour operators for a good and successful booking level for summer 2020.”
Whilst the bridging loan does provide an immediate remedy for Condor, it is far from a long-term solution. Under strict EU state aid regulations, the loan can only be granted for a period of six-months.
Condor is hoping that the loan will get the company through the leaner winter months, and that it’s finances will be in a much healthier position going into the summer tourism season next year. The assumption then would be that Condor restructures the bailout loan into commercial debt, and repay’s the state aid in full.
The long-term future of the airline will clearly rest on how well the company is re-financed and then managed through the coming year to 18 months. Whilst Condor is a profitable business, it now no longer has the support of a large corporate entity behind it, and is standing on its own in a very competitive and cut-throat European travel industry.
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