The German airline arm of failed Thomas Cook last night secured a €380 million state-funded lifeline to keep flying.
Unlike the UK, the German government stepped in to bail out Condor, salvaging the profitable subsidiary carrier from the liquidation of its parent company and preserving almost 5,000 jobs.
The six-month emergency bridging loan to cover the carrier over the winter low season is being provided by the KFW state development bank and backed by the government in Germany.
The deal effectively shields the carrier from possible claims against its former UK parent company.
But British Airline Pilots Association general secretary Brian Strutton questioned why a different course was taken in the UK, calling it a “national scandal”.
He said: “Good luck to the Condor staff and customers.
“But with UK holidaymakers stranded and 9,000 staff out of a job, the Thomas Cook directors need to explain why the UK airline had to be closed but the German one was allowed to continue to operate.
“How was it funded, because it seems there is nothing left in the coffers for UK staff?
“And why couldn’t the UK government give the same kind of bridging support as the German government when it was well known that Thomas Cook had a Chinese buyer lined up? It’s a national scandal.”
The Condor cash injection will be subject to approval by the EU competition authority at a date yet to be confirmed.
Condor generated an operating profit of €43 million and turnover of around €1.8 billion in the 2018-19 financial year operating a fleet of 58 aircraft.
The leading German leisure airline carries eight million passengers a year from eight airports in the country to more than 100 destinations in Europe, Africa and the US.
“The state guarantee for a bridging loan was applied for in order to prevent possible liquidity bottlenecks at Condor, resulting from the insolvency of its former British parent company, Thomas Cook Group,” according to the airline.
Condor is to apply for a “protective shielding procedure” to protect itself from possible claims of its insolvent parent company and to separate itself from the group.
The protective shield is a special procedure in German insolvency law, which can be granted in cases with a positive prospect of a successful restructuring by the court.
A provisional creditors’ committee will also be appointed to which the main creditor groups such as suppliers, employees and airports will be represented.
Condor CEO Ralf Teckentrup said: “4,900 Condor employees, partners, suppliers and customers thank the German government for this decision.
“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.”
He added: “As a profitable company with a positive cash flow and good business development, we are using the shielding procedure to protect ourselves from possible claims of our former British parent company, Thomas Cook 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 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.
“Our fleet is operating and ticket sales for Condor flights continue as normal.”
The airline added: “The flight operations of Condor are continuing as planned. The highly motivated employees work with full dedication to fly Condor customers reliably to their holiday destinations all over the world and back home.”
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