The sale of the German vacation airline Condor will not take place anytime soon – new negotiations are not expected to begin until mid-2022 at the earliest.
The last year and a half have been an absolute horror for Condor in every respect. First the bankruptcy of the parent company Thomas Cook, then fears about its own bankruptcy, before the state was bailed out. But that’s far from enough, because after a bidding war, Condor should actually take over from LOT – until the Poles withdrew in the Corona crisis and Condor was again on the verge of bankruptcy. The airline survived the crisis with further state aid, but a sale of the state-supported airline is still to follow – albeit much later than previously planned. as reported by Reuters.
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Negotiations to sell Condor in 2022 at the earliest
The vacation airline, which was profitable before the corona crisis, was only able to get across water in recent months thanks to government support. In total, KfW provided the airline with just under 550 million euros in state aid as part of the restructuring process. A repayment of these loans will be almost impossible for Condor on its own, which is why an independent future is unrealistic even after the end of the protective shield proceedings. The sale of Condor has therefore been in the air for a long time, although it is clear that the conditions will be significantly worse this time. The mother of the Polish LOT had called for a purchase price of 300 million euros when the purchase agreement was signed at the beginning of the year. It is unlikely that such an amount will be achievable after the crisis.
Presumably this is one of the reasons why the indirect state participation in Condor will be maintained for longer. Ralf Teckentrup, CEO of the airline, said the following to journalists:
I don’t see we’re going to have an investor process in the next twelve months.
Condor CEO Ralf Teckentrup to journalists
Teckentrup further stated during the conversation that he does not see a start of possible sales negotiations before mid-2022. That would mean that the airline could probably change hands in 2023 at the earliest – provided that a potent buyer can be found for the airline. In two years’ time, Condor’s problems will certainly not diminish due to growing competition from Lufthansa long-haul long-haul routes and its own outdated Boeing 757 and Boeing 767 fleets. The fact that the highly indebted airline will repay all of the government loans can be viewed as questionable, given the debt of 550 million euros, even if the sales process is successful.
Condor wants to attack again in summer 2021
However, Condor should not operationally stop the difficult topic of sales. The airline makes this clear in many ways. Among other things, Condor is planning to resume long-haul routes to the Maldives and the Dominican Republic as well as increasing capacities to the Canary Islands in December. In addition, Condor has already published a surprisingly extensive flight schedule for summer 2021. The airline hardly wants to make any cuts in the number of destinations compared to two years ago.
At the same time, however, Condor is still far from over the top in operational terms. According to Teckentrup, the capacity is currently only around 10 to 15 percent of what was offered in the previous year. The plan for the summer flight schedule is 60 to 75 percent of the capacity from 2019. That would certainly be a big step to get back on its feet, but even with this capacity Condor will probably not be able to operate profitably in the summer. This is particularly true as the airline does not want to make any job cuts until the end of 2021. Under these circumstances, a sale is likely to be a difficult undertaking – even if the sales process does not begin until 2022.
Conclusion on the delayed Condor sale
It will be some time before Condor changes hands. Meanwhile, the signs for a sale are not necessarily good either, so it will be exciting to see Condor get back on its feet after the crisis. With a debt burden of 550 million euros, there will probably not be too many prospective buyers for the airline in 2022 either.
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Author
Moritz not only loves traveling, he also loves luxury hotels all over the world. In search of new experiences, Moritz has already tested dozens of airlines and explored more than 100 cities. On reisetopia he lets you share his experiences and tips!
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