Thomas Cook’s Condor gets US$420mil lifeline from Germany


  • Business
  • Wednesday, 25 Sep 2019

A banner of British travel firm Thomas Cook is seen at Punta Cana's international airport, in the Dominican Republic, on September 23, 2019. - British travel firm Thomas Cook, both a tour operator and an airline, collapsed on Monday leaving hundreds of thousands of holidaymakers stranded worldwide and sparking the UK's biggest repatriation since World War II. (Photo by Erika SANTELICES / AFP)

FRANKFURT: Frankfurt-based airline Condor’s request for emergency financing was granted by the German government in a bid to get the tourist carrier through the winter after the demise of U.K. parent Thomas Cook Group Plc.

The credit worth 380 million euros ($420 million) must be approved by the European Commission and will be valid for six months, according to the airline, which has around 5,000 employees. Some 240,000 tourists are currently relying on Condor to get back to Germany from vacation, according to Germany’s Economy Ministry.

The government is in "constructive talks” with the EU executive on the loan, the ministry said in a statement late Tuesday. Condor should also be protected from Thomas Cook’s creditors, the ministry added. The Commission wasn’t immediately available to comment.

"We are a healthy company, and the liquidity we generated has in the past been buried at the parent company,” Condor Chief Executive Officer Ralf Teckentrup told reporters Tuesday.

"This bridge loan will take us through the coming winter. In summer, an airline like us needs no such bridge loan.”

Thomas Cook filed for liquidation in the U.K. on Monday, while profitable parts of the group are still fighting for survival. Condor operates 59 of the group’s more than 100 aircraft, and Teckentrup said he is hopeful the unit can find a new home. The bridge loan will protect "many” of the jobs at Condor, Economy Minister Peter Altmaier told reporters in Berlin.

"Condor is a profitable company, so our decision is based solely on its business, and not on political criteria,” Altmaier told reporters in Berlin.

‘Different Case’ The German state of Hesse, where Frankfurt is located, said it will take on 50% of the risk that the federal government is assuming by providing a state guarantee of 190 million euros.

Air Berlin, once Germany’s second-largest airline, was liquidated in 2017 despite the government stepping in to help with a bridge loan of 150 million euros. The airline’s administrators said his month that the loan had been paid back in full.

"We’re a different case than Air Berlin,” Teckentrup said. - Bloomberg


Article type: metered
User Type: anonymous web
User Status:
Campaign ID: 7
Cxense type: free
User access status: 3
   

Across The Star Online


Air Pollutant Index

Highest API Readings

    Select State and Location to view the latest API reading

    Source: Department of Environment, Malaysia