European Commission approves €380 million loan to Condor
Condor, which was a subsidiary of the now-bankrupt Thomas Cook group, will continue to fly for the near future, as a crucial bridge loan for the leisure airline was approved by the European Commission (EC). Following the approval, Condor to use the loan to get through the limited cash flow months of winter and continue operations as normal.
EC officially approved a $419 million (€380 million) six-month bridge loan, which the German Federal Government and the local Government of the State of Hesse via a public development bank KfW granted on September 24, 2019. The governing body of the European Union justified the move saying that the loan will “ensure the orderly continuation of flight services” as it is in the best interest of Condor’s passengers.
Ralf Teckentrup, Chief Executive Officer of Condor, was more than happy with the “timely and positive decision” from the European Commission, as the loan is not only an “important step towards securing the future” of the German airline but will also help maintain a “proper” operating aviation market within Germany and Europe.
However, the loan comes with a few conditions to avoid disruption of competition. Firstly, Condor will receive the loan in installments, as the airline will have to showcase its needs every week and will get the required cash only if the previous installments were used up completely. Secondly, Condor will have to repay the $419 million loan fully in six months – if Condor is unable to pay, the leisure carrier will have to go through a comprehensive restructuring process in order to ensure its long-term stability. The European Commission will approve and assess the potential restructuring plan and confirm its viability.
But Condor remains hopeful. According to Teckentrup, the current trends in bookings have surpassed the airline’s expectations, thus the airline is “in advanced discussions with all tour operators for a good and successful booking level for summer 2020”.
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