LOT Polish Airlines owner acquires Condor

Condor Boeing 757-300. Photo: © Oliver Holzbauer

Polish Aviation Group (PGL), the holding company of LOT Polish Airlines, has announced that it will acquire German leisure carrier Condor.

The German airline was previously part of British Thomas Cook Group, before the group entered liquidation in September 2019. Condor managed to separate itself from its previous owner and continued to fly without interruption. It received a bridging loan from the German government and the State of Hesse, amounting €380 million (US $419 million), to cover short term operating costs. The airline was then placed under a protective shield proceeding by a court, meaning that it cannot be made liable for claims resulting from the Thomas Cook liquidation.

LOT’s owner PGL (Polish: ‘Polska Grupa Lotnicza’) says it will fully repay the granted bridging loan. Although a specific purchase price and further takeover expenses have not been named, these are therefore likely to be above €380 million.

Furthermore, the ‘iconic’ Condor brand will stay and continue to operate as a leisure airline. PGL is also not making changes to the German airline’s management team. Current Condor CEO Ralf Teckentrup is leading the carrier since 2004.

The acquisition of Condor fits perfectly into PGL’s strategy. It also secures the future of Condor and offers stability and great opportunities to its employees, customers and business partners. We want to develop Condor’s iconic brand in Germany and also introduce it to other markets in Europe.Rafał Milczarski, President of the Management Board of PGL

While no detailed plans have been announced, PGL says it would order new 20 aircraft in the coming months, to modernise and potentially grow Condor’s fleet. The leisure carrier operates its long-haul flights using 25 year-old Boeing 767-300ER, which need replacement. It previously said that even though the company itself is profitable, an investor would be required for a fleet renewal programme. LOT Polish Airlines, its new sister company, operates 15 Boeing 787 Dreamliner aircraft on its long-haul network. The two airlines’ fleets have nothing in common, as Condor operates Airbus A320 family aircraft and Boeing 757-300 on shorter routes, while LOT uses Boeing 737 (including the currently grounded 737 MAX), as well as Embraer E-Jet and De Havilland Dash 8-400 regional aircraft.

LOT Polish Airlines operates 15 Boeing 787 Dreamliner. Photo: © Tony Hisgett

PGL has also said that it might deploy Condor on some routes outside of Germany. The group mentioned Poland and Hungary – both served by LOT – as potential future leisure markets for the airline.

Combined, Condor and LOT carry more than 20 million passengers per year. This would place PGL approximately on rank 13 on the list of Europe’s largest airline groups, once the takeover is completed. LOT Polish Airlines currently has hubs in Warsaw, Poland and Budapest, Hungary, while Condor operates from various German airports.

Transactions for the acquisition deal are stated to be closed by April 2020, pending antitrust approval.

LOT is part of the Star Alliance – just as Lufthansa, which also showed interest in taking over all or parts of Condor, even before the Thomas Cook insolvency. This means that the Polish and the German flag-carriers are partners, more than competitors, when it comes to their flight networks. Newly acquired Condor currently also has codeshare agreements in place with Lufthansa on select routes to and from its hubs Frankfurt and Munich. It is unclear whether the two German airlines remain partners on these flights. Lufthansa last year announced plans to bring its low-cost subsidiary Eurowings to Frankfurt, while also expanding its footprint in Munich, to directly compete with some of Condor’s long-haul flights.

Read more: Condor removes Thomas Cook branding