FRANKFURT—German leisure carrier Condor has secured a €550 million ($595 million) rescue package by the German government and the state of Hesse, ensuring the airline can survive a prolonged halt to regular flight operations in the coronavirus crisis.
The package, announced April 27, has already received regulatory approval by the European Commission and is the second major intervention by the federal government in Germany’s travel industry after having provided a €1.8 billion loan guarantee to tourism group TUI. The government is also negotiating a multi-billion package to come to the rescue of Lufthansa which said last week that it cannot survive without state aid.
Condor was in urgent need of refinancing as another €380 million bridge loan became due earlier this month. It was initially provided by the federal government and the airline’s home state to allow more time for the company to find a buyer following the collapse of its former owner Thomas Cook. Polish Aviation Group (PGL) had agreed to buy Condor and run it as a sister airline to LOT Polish Airlines but bailed out at the last minute. Proceeds from the failed sale were also to be used to repay the loan.
The new package is made up of €296 million coming from the coronavirus relief package the government has created for affected industries and an additional €254 million to repay the original loan, the amount Condor has used to date.
The airline said April 27 it is now certain that operations can continue. Condor is still in the protective umbrella restructuring scheme now that its would-be investor has stepped back. The process of emerging from it will now be delayed by several months, industry sources say. Condor is planning for ownership to be transferred to a trustee upon leaving the scheme and until a new owner is found. But management does not expect a new sale process to begin until well into 2021 at the earliest when the sector is emerging from the COVID-19 crisis.
Condor currently operates none of its scheduled services because of the travel restrictions into and out of Germany. It has been flying repatriation missions for several weeks and is now using some of its Boeing 767s for cargo flights.
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