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Earlier this week, Thomas Cook ceased operations. Thomas Cook is one of the oldest travel agencies in the world. It was more than just an airline, it was more than anything a package tour operator, airlines, hotels, etc.
It is unfortunate that the British airline Thomas Cook ceased operations when it was not even the part of the business in difficulty.
Another interesting aspect, Thomas Cook owns the German company Condor Airlines, which is profitable. When it was announced that Thomas Cook had ceased operations, Condor announced that they would continue to operate normally and that the German government would probably grant them a bridge loan. Well, we now have the details of that.
Germany grants condor bridge loan guarantee
Yesterday, Condor received a guarantee from the German Government and the Government of Hesse of a six-month bridge loan of EUR 380 million. This is also subject to the approval of the European Commission, in which case the loan can be disbursed.
This was done to prevent Condor's liquidity problems as a result of the insolvency of their parent company. As I said, Condor as such was profitable, but that does not mean they had the cash to run.
Ralf Teckentrup, CEO of Condor, said:
"The 4,900 employees, partners, suppliers and customers of Condor thank the German Government and the Government of the State of Hesse for this decision. Condor is a healthy and profitable company, which will also register a positive result for the current year. Since our insolvent parent company used our cash for the lower, seasonal winter booking period, we need this bridging funding for the upcoming winter season. This decision is an important step in securing our future for our company. "
Condor 767
Condor flights operating as usual
Condor intends to continue to respect his normal full schedule, so there should be no disruption to the reserved persons.
Condor 767 in Whitehorse
Separation of Thomas Cook through a protective shielding procedure
Condor will file an application to initiate a protection proceeding to protect itself from potential claims of its insolvent parent company.
This procedure is part of the German insolvency laws, which can be granted in such cases. Condor CEO Ralf Teckentrup said:
"As a profitable company with positive cash flow and good business development, we use the shielding procedure to protect us from potential claims from our former British parent, Thomas Cook Group plc. In the current situation, this step is the best for our customers, our business partners, our suppliers and for us. This gives us total independence from Thomas Cook Group plc and increased security for our future. This is a formally necessary and logical step for us. Our business is continuing as planned and we will continue to ensure that our customers arrive safely and reliably. "
What is the next step for Condor?
Although Condor is profitable independently, they are clearly in a difficult position to close their parent company. One may wonder if the airline could find new independent investors or what would be the next step for the airline.
Earlier this year, Lufthansa expressed interest in taking over Condor (in fact, it would take over the airline because it owned it). I am curious to see if this situation is the cause of this situation.
Condor 767 business class
Bottom line
Condor is an excellent leisure company and I am pleased to see that its activities are proceeding as usual. This bridging loan guarantee will help them avoid liquidity problems. It will be interesting to see if they remain independent or if Lufthansa ends up taking them in hand.
What do you expect from Condor in the future?
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