Yesterday, Condor Flugdienst received a guarantee from the German government and the Hessian State Government for a six-month €380 million bridging loan by German Development Loan Corporation KfW. This loan cannot be dispersed until it has been approved by the European Commission. The date for the decision is still to be confirmed. Condor is dependent on the bridging loan to prevent possible liquidity bottlenecks at Condor, resulting from the insolvency of its former British parent company, Thomas Cook Group plc.
"4,900 Condor employees, partners, suppliers and customers thank the German Government and the Hessian State Government for this decision," said Ralf Teckentrup, CEO of Condor Flugdienst. “Condor is a healthy and profitable company, which will also record a positive result in the current year. Because our liquidity for the seasonal weaker winter booking period was used up by our insolvent parent company, we need this bridge financing for the coming winter season. This decision is an important step towards securing our future of our business.”
Rumours are swirling that Condor could take on some routes and aircraft from the UK company but despite operating flights on schedule since its parent’s liquidation, the reputational fallout could damage future trading.
Condor is applying for a protective shielding procedure in order to protect itself from possible claims of the insolvent parent company, Thomas Cook Group plc and to separate itself from the Group.
“In the current situation, this step is the best for our customers, our business partners, suppliers and for us. It gives us full independence from Thomas Cook Group plc and more security for our future. It is a formally necessary and logical step for us. Our business operations continue as planned and we will continue to ensure that our guests reach their destination safely and reliably," says added Teckentrup.
The protective shield procedure is a special proceeding of German insolvency law, which can be granted in cases with a positive prospect of a successful restructuring by the court. In addition, a provisional creditors' committee will be appointed to which the main creditor groups such as suppliers, employees and airports will be represented.
Condor operates a fleet of 58 aircraft including Thomas Cook Aviation and Thomas Cook Balearics aircraft. In the 2017/18 financial year, Condor reported an operating result (EBIT) of approximately €43 million. An increase in earnings is expected for the 2018/19 financial year ending 30 September. Condor Flugdienst generated sales of around €1.8 billion in the 2017/18 financial year with positive cash flow.
"Condor has generated positive results over the last few years and has proven that we can hold our own and thrive in the market. This distinguishes us from cases such as Air Berlin and Germania. Furthermore, the interest we generated within the market speaks to our attractiveness as an Airline and a business," says Teckentrup.
On September 23, Adria Airways announced that it was “temporarily” ceasing the majority of operations for 24-25 September, although some flights are operating into Frankfurt.
The airline is seeking “solutions in cooperation with potential investor” to enable it to resume operations. Unless the airline finds that solution today, its halt on operations will likely become permanent.
In May, the airline was forced to issue a firm denial to press reports that it had requested state aid during a meeting with the Prime Minister, while its order for 15 SuperJet100s was cancelled in April.