Sectors

Takeover by Polish airline Lot burst – because of Corona

The German holiday airline Condor is currently kept afloat with government loans. The Polish airline Lot actually wanted to get involved. But because of the Corona crisis, the deal has now burst.

The holiday plane Condor with almost 5,000 employees has to tremble again for its future. The deal with the Polish airline Lot, which Condor was supposed to take over these days, broke in the Corona crisis. The Lot parent company PGL canceled the planned purchase on Easter Monday without reason, as Condor in Frankfurt confirmed. When looking for a new owner, the company sees the German state as a possible savior.

Among other things, a model in which a trustee could lead the company to a later sale comes into question, a Condor spokeswoman for the German Press Agency said on Monday. There are different options. Direct state entry would also be conceivable, but is not considered a favored solution in Berlin. The Federal Ministry of Economics stayed covered on Monday. A spokesman, referring to the ongoing bankruptcy proceedings for Condor, said they did not want to comment on the process.

Million dollar loan for Condor expires

Time is short, because on Wednesday (April 15) the KfW loan of EUR 380 million plus interest is due, with which Condor had been kept in the air over the winter. The purchase price of the Poles scheduled for repayment is now not available. Condor did not apply for an extension of the EU-approved loan, but instead opted for new loans for the Corona crisis. Additional cash could flow from an escrow account where funds for Condor tickets landed after April 1st.

The prerequisite for this would be the end of the so-called protective shield procedure, in which Condor saved itself six months after the bankruptcy of its former parent company Thomas Cook. The protective shield plan of the insolvency expert Lucas Flöther has been legally binding since last Thursday, but is currently not working. Nevertheless, Condor is sticking to the plan to quickly leave the protective shield. Discussions between PGL and Condor about possible contractual penalties due to the cancellation are still pending.

PGL won against two applicants

In this mildest form of restructuring in German insolvency law, the management under Ralf Teckentrup had continued the business and concluded the purchase contract with PGL in January after a bidding process. The state holding company prevailed against two financial investors with a higher bid. Politicians of the national conservative PiS government had celebrated the takeover as a sign of Poland’s growing economic importance.

Under the protective shield, Condor had terminated rental contracts, fired some employees and concluded remediation agreements with the unions. The holiday plane also lost its business with the Corona crisis, and most recently flew homecoming flights on behalf of the federal government and freight.

The Lot has also been hit hard by the virus. “In the case of the Lot, we certainly cannot do without public help,” Poland’s Treasury Minister Jacek Sasin had recently told TVN24.

Is Condor landing at Lufthansa again?

If Condor had already been owned by a state airline when it was taken over by the Polish Lot, it could now become the German state holiday airline as a result of the Corona crisis. There is even speculation in the industry that in such a case Condor could end up at Lufthansa again, to which it had at least partially belonged for decades since it started in 1956. After Thomas Cook’s bankruptcy in autumn, a takeover by Lufthansa would probably have failed due to EU antitrust law. But the Corona crisis has already made a number of things possible that would previously have been considered a violation of the rules of the free market economy.

The World Aviation Association IATA has long called on governments to provide financial support to airlines around the world. She fears that the passenger business may lose almost half of its revenue this year. Even the US does not rule out the state’s entry into domestic airlines. If the government supports airlines with loans or direct aid, they can also participate in them, US President Donald Trump had said.

More coming soon

Update now

Tags

Related Articles

Back to top button
Close
Close