The politics of this one sure is going to be interesting…
Continue reading: Condor Wants German State Aid, Despite LOT Polish Airlines Investment
Share your questions, experiences, and thoughts below.
The airline will remain German, it’s just that its shareholder will be from Poland. So what’s the issue, especially since the transfer of shares hasn’t taken place yet?
According to German Spiegel Magazine the Condor & PGL deal is quasi dead. It is reported that PGL seems to try to get out of the deal by requesting guarantees from the German government that essentially would transfer any risk from PGL to the German Government.
LOT is probably just playing hardball and wants to renegotiate the agreement in light of COVID. Their hope is that the German government extends Condor a lifeline and that the deal can be postponed a couple of months. The problem for Condor is that no one else is about to buy them in this environment, so it's either come to a deal with LOT or risk collapse. LOT has a pretty good bargaining position.
@Michal
Renegotiate? LOT will try to get out completely. The only valuable asset of Condor is the brand name. Fleet is way too old and has to be renewed anyway (very costly), and in light of the recent crisis there will be a global surplus of pilots and stewardesses.
@Max
LOT will probably walk away if they can't get favorable new terms, but I don't see why they wouldn't try renegotiating. You buy stocks when they are low. COVID-19 appears to have peaked in South Korea 2-3 weeks ago (based on the number of daily deaths and new cases) and has been on the decline since. By the time peak summer comes around, it will have long passed through Germany and it will be business as usual. By then we will back to our usual pilot shortage.
Lufthansa is pretty much like Delta in that they despise anything that threatens their increasing control of the market. Fairness, common sense, and rationality are absolute non-factors in their considerations. If they were humans, they'd be sociopaths.
Yes, Delta, who offers by far the best customer experience, is akin to a sociopath. A sociopath is whoever came up with United's Basic Economy restrictions or markets Project Oasis as an upgrade.
Well, just because Condor will be bought by a Polish company (if that even happens), they will still pay most of their taxes in Germany. Lufthansa is also applying for government aid in Switzerland, Austria and Belgium for their subsidiaries...so why should an eventually bought Condor no be able to receive aid from the German government?
@Christian - you nailed it! Lufthansa and Delta have a lot of parallels - they are two carriers who have enjoyed the highest degree of monopoly at almost all of their hubs and are the most anti-competitive airlines in the industry. In fact, on most of their routes, they are the only carrier and fly those routes 3x - 4x daily! And still keep complaining about 'unfair competition' - all the time.
In addition, it can be guaranteed that they will scream and resort to cheap tactics whenever any airline starts a flight to any of their hubs. Not to mention those filthy anti-ME3 videos on their website! What an irony both of them are now asking for state aid!