The German airline Condor, a subsidiary of the bankrupt British tour operator Thomas Cook, obtained a state loan guaranteed by the German state of €380 million which will allow it to continue to fly.
Following the announcement of Thomas Cook’s bankruptcy on September 23, 2019, the German airline had requested an emergency loan from the federal government and the government of Hesse as it is based in Frankfurt am Main.
The next day, Condor confirmed that it had received a pledge from the German government and the Hesse state government for a six-month bridging loan of 380 million euros aimed at “preventing possible liquidity shortages”. The loan, however, is subject to the approval of the European Commission. “When the decision from Brussels will come cannot be said yet”, a press release by Condor indicates.
Condor is now expected to file an application to begin a protective screen process in order to separate itself from its parent company. “As a profitable company with a positive cash flow and good business development, we are freeing ourselves from the possible claims of our English parent company Thomas Cook Group,” says Ralf Teckentrup, CEO of the airline, adding “in the current situation, this step is the best for our customers, our business partners and for us”.
Founded in 1956, Condor operates a fleet of 58 aircraft and currently employs 4,900 people. Its core destinations are the United States and the Mediterranean area.
Ongoing repatriation in the United Kingdom
The Civil Aviation Authority (CAA) announced on September 25, 2019, that it had already repatriated about 20% of the 120,000 passengers that were due to return to the United Kingdom but found themselves stranded following Thomas Cooks’ bankruptcy.
“We have now operated over 130 flights in the first two days of this operation, returning almost 30,000 people to the UK,” said Richard Moriarty, Chief Executive of the UK Civil Aviation Authority. “So far, we are flying home 95 percent of people on their original date of departure at the end of their holiday”.
70 flights are planned on September 25, 2019, to bring back more than 16,500 people to the UK. “I would like those remaining on holiday to enjoy the rest of their stay,” said Moriarty.
On September 23, 2019, British tour operator Thomas Cook declared bankruptcy after negotiations with creditors and Chinese shareholder Fosun failed. The company went into “liquidation with immediate effect”, leaving more than 600,000 customers stranded.
Thomas Cook’s collapse could have a damaging short-term effect on the tourism economy of certain countries. For example, in Greece, 10% of tourists were flying in with Thomas Cook. The Greek tourism confederation has estimated that the airline’s closure would add up to €500 million the economic losses for the country’s businesses.
While the 9,000 employees of Thomas Cook in the United Kingdom are certain to lose their jobs, all over Europe workers are facing uncertainty. In Belgium, 80% of the 600 people working in the company’s travel agencies could see their positions preserved. Thomas Cook France, the French subsidiary of the group that employs 780 people and operates 172 travel agencies, has announced it would apply for a placement in receivership.
