LOT Polish Airlines Cancels Condor Takeover

Filed Under: LOT, Other Airlines

LOT Polish Airlines’ takeover of Condor has been called off, meaning the German leisure carrier’s future is uncertain.

LOT Polish Airlines’ takeover of Condor

In January 2020 it was announced that Polish Aviation Group (PGL), the parent company of LOT, would be acquiring Condor Airlines. This came after Condor’s parent company, Thomas Cook, ceased operations.

The German government had given Condor a bridge loan to stay in business, since the airline had a sustainable business model but was just in the wrong place at the wrong time.

From the perspective of consumers, LOT’s takeover of Condor seemed like the best case scenario, when you consider that Lufthansa was the other frontrunner for a LOT takeover:

  • LOT planned on maintaining Condor’s base in Germany, which would have been a win for German consumers
  • If LOT had taken over Condor over Lufthansa, there would have actually been some competition in Germany

LOT was supposed to take over Condor

The deal is off, so now what?

According to Polish media, PGL has confirmed that LOT Polish Airlines has cancelled their transaction to take over Condor. The deal was initially supposed to close in April, and it looks like LOT was able to get out of it.

Obviously we’re in an unprecedented situation at the moment, so it’s not surprising that LOT would want to exercise whatever option they have to not take over an airline at the moment.

It’s not yet known what kind of a penalty was paid to get out of this deal, or what this means for the future of Condor.

This is really unfortunate for Condor, which is a great, niche airline. It’ll be interesting to see if Lufthansa now attempts a takeover, or if the current situation makes them reconsider.

What an unfortunate time to be a generally successful niche airline that currently doesn’t have investors — first they got stuck in the Thomas Cook fiasco, and now they’re dealing with the greatest crisis the airline industry has ever seen.

Will Lufthansa now attempt a Condor takeover?

Bottom line

I’m rooting for Condor, and all the jobs at stake. Ultimately if LOT could get out of the deal then I can’t blame them for not wanting to follow through with an airline acquisition at the moment.

Now we’ll have to see if Lufthansa tries to swoop in, or if this is too much for the German flag carrier to take on at the moment.

Comments
  1. They have operated a ton of repatriation flights for the German government so I doubt they would thank them by just letting them go bust. Especially since it looks like Lufthansa is getting a significant amount of government aid. I expect they will be put on life support until this over and then will look for new investors.

  2. No surprise here as reports in Der Spiegel reported of this the last 2-3 weeks. Condor will probably fall into Lufthansa’s hands.

    With the current situation, i doubt noses at EU level will protest LH taking over Condor. The alternative would be for Condor to shut down and jobs lost. Nobody wants that.

    While i imagine LH has enough issues on its own i’d imagine that taking over Condor could be a condition for it to receive support/bailout from the gov.
    I hope Condor doesn’t end up closing shop.

  3. Sad but not unexpected. As a pretty frequent LOT traveller, with several already booked flights with them to SFO, MIA and LAX (in the distant future), I just hope that they’re able to survive and keep their long haul network!

  4. I reckon Lufthansa would end up acquiring Condor in order to continue their hold on the German market.

  5. Is this a Pittsburgh curse?

    Every foreign LCC failed after flying to PIT. No other city is served by more than one failed foreign LCC except PIT. It was WOW, now Condor (technically leisure isn’t always LCC).

    BWI might also fall under this curse as Norwegian is in trouble too.

  6. I would think Germany would want more than one airline dominating their markets. I’ve never been to Germany, so is there a reason the government would want more of a Lufthansa monopoly?

  7. I’d be surprised if Lufthansa actually takes over Condor considering the state the whole group is in right now. Things aren’t looking too bright for Austrian and Brussels and plus they officially put their own Tourist Airline plans on hold. Ofc this could have been only a big bluff… Anyway I hope Condor will survive. One way or another!

  8. I’m not sure why Lufthansa would give any real consideration to taking Condor over. Lufthansa already said they don’t expect demand for travel to recover for years. If that is true, and you are bleeding cash big time, taking over another airline makes no sense.

  9. Let’s see what happens… my problem with condor is that they have a very old fleet, so in the near future they will need a lot of investments for new planes. Would be a pitty for their special routes if Condor goes bankrupt, but maybe Eurowings can continue them.
    As for the LH monopoly in Germany: it is a pretty small country, so there is not a big need for domestic air travel. The train system is fantastic, so you only need to use the “monopoly” if you are in a big hurry (eg Business travellers). Flying internationally you get all the competition you want from other airlines.

  10. Hopeful they don’t pack it in. I have ticket to fly to Europe late summer. I did purchase travel insurance just in case that cover 75%.

  11. According to Polish media – unofficially – Condor didn’t provide all necessary documents on time including financial condition/status. And obviously current dramatic situation doesn’t help either.

  12. Isn’t it obvious at this point that mass leisure travel is basically done for the foreseeable future (at least 2-3 years), so there’s zero reason for any of these leisure airlines to exist? The entire commercial aviation industry is facing the largest contraction in its history, with no obvious path to full recovery. There’s no market for leisure airlines to exist now, and only state-supported or bailed out mainline airlines will really be functional after their year, serving critical business and government needs, with whatever leisure and personal travel that is possible (in a world of closed and restricted borders) simply filling a few seats in the back of the plane.

    Condor was a nice airline, I’ll miss their flight from Phoenix to Frankfurt (our only nonstop European service, other than London).

  13. Condor is probably dead now. There will be a lot of airlines not around at the end of this year. Most things will be different when this virus is over

  14. Thomas Cook Aviation, who were sort of a subsidiary for Condor, quietly shut down for good earlier this month. So, not good looking good for Condor overall these days.

  15. No surprise. It’s not just the current crisis, it’s the business case which fell apart. Most forecasts are expecting essential duty travel to recover first, the short haul leisure and only at longer term long haul leisure and conferences. So Condors business is to recover last, unfortunately.

    Therefore, I don’t think LH (or IAG) will be willing to invest in such a non existent case … In fact, I have some doubts that IAG will go ahead with their UX takeover. The business case is slightly better (UX was profitable), but the future looks grim as most is long haul leisure. Probably paying the 42m EUR penalty to the Hidalgo family will (unfortunately) be worthwhile …

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