LOT Polish Airlines Buys Germany’s Condor

Filed Under: LOT, Other Airlines

Condor has been looking for a buyer for the past several months, and it seems like they’ve found one. As far as I’m concerned, this deal is just about the best case scenario for consumers.

Why Condor has been looking for a buyer

In September 2019, Thomas Cook ceased operations. Thomas Cook was one of the world’s oldest travel companies, and they were more than just an airline, as their primary business was selling package holidays.

Thomas Cook also owned Germany’s Condor Airlines, which was actually profitable. So it sure would have been sad to see Condor go out of business due to the Thomas Cook parent company, when the airline was making money.

Germany granted Condor a bridge loan, which made a lot of sense, since this was a situation where an airline really only needed a few months to get things in order, and nearly 5,000 jobs were at stake.

LOT Polish Airlines buys Condor

It has just been announced that Polish Aviation Group (PGL), the parent company of LOT Polish Airlines, will be acquiring Condor Airlines. The deal is expected to close in April 2020 once antitrust approvals are obtained. With this deal, PGL will repay the bridge loan from Germany in full.

LOT Polish 787

As it’s described, this creates one of the “leading European aviation groups with Germany and Poland as core markets.”

It’s said that Condor will become the center of PGL’s leisure strategy with a focus on growth in Germany and adjacent markets.

Going forward, Condor will continue to operate under the current brand, with the same management team, and with the same service as they currently offer.

Condor 767

The president of the board of PGL, Rafał Milczarski, had the following to say:

“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. We wholeheartedly welcome all Condor employees to the PGL family and invite them to build together one of the greatest aviation groups in Europe.”

The CEO of Condor, Ralf Teckentrup, had the following to say:

“We are pleased that Condor, Germany’s most popular leisure airline, has gained in PGL and LOT stable, experienced and dynamically developing partners who secure the future of our business. Together we will serve twice as many passengers, thus forming one of the largest aviation groups and the leading leisure airline group in Europe. Our partners and customers can safely plan their holiday flights with Condor.”

What will Condor’s future really look like?

When considering LOT taking over Condor, I think there are a few things that immediately come to mind:

  • LOT Polish perpetually has an aircraft shortage as they continue to grow, and they’re currently leasing a few Air Belgium A340s
  • What will happen with the future of Condor’s long haul fleet, as they currently fly outdated 767s, and surely will eventually have to replace them?
  • Will we see Condor transfer any long haul routes from Germany to Poland?

LOT Polish is leasing Air Belgium A340s to support growth

Not all of these questions are answered in the press release, though I get the sense that it will overwhelmingly be business as usual for both companies:

  • I doubt LOT will want any of Condor’s 767s, given the configurations
  • I doubt Condor will be getting any LOT 787s, given that the airline doesn’t have enough planes to operate their own network as is
  • Condor has a unique route network that works for them, and I doubt they’ll change that much; in other words, I doubt that the Frankfurt to Whitehorse flight will now operate out of Warsaw instead 😉

Condor 767 in Whitehorse

What I do think we could see is:

  • More connectivity between Polish cities and Frankfurt/Munich, where most Condor long haul flights operate out of
  • Perhaps long term we could see Condor add some leisure long haul routes out of Warsaw

Bottom line

I’d consider LOT’s takeover of Condor to more or less be the best case scenario. Both airlines have successful and focused strategies. While we’ll surely see some synergies between the two airlines, I don’t get the sense that LOT is trying to fix something that isn’t broken.

The big question — regardless of ownership structure — will be what Condor’s long term plan is for fleet renewal.

What do you make of LOT’s takeover of Condor?

Comments
  1. Will the LOT flights out of BUD become Condor? It seems weird to me an airline with Polish in the name is BUD’s main intercontinental airline.

  2. What about Condor joining Star Alliance? Seems like the most likely benefit to customers, esp. considering the connectivity already with Lufthansa.

  3. At the press conference, LOT said that in the next few months it’d be ordering 10 long haul planes for itself and 20 for Condor.

  4. Doesn’t LH own a majority share of LOT? Or am I totally confused! If so, this would essentially be LH buying Condor which if they had tried to do likely would have run into issues with a government approval.

  5. LOT has some experience in operating outdated 767s, so…I wouldn’t expect much to change for condor immediately..I guess that LO longhaul charters ex PL are going to be opb Condor in the near future. Pity, as those have been usually nice opportunities to grab a J seat to somewhere in Asia on the cheap 🙂

  6. It seems like a good fit. LH would have run into monopoly issues if they bought them. I think Lufthansa is a better fit operationally but LOT isn’t too bad. The whole Star Alliance issue could make things interesting for Condor partners like Alaska I guess.

  7. @Max J
    I think LOT would definitely want to, but Lufthansa will probably veto Condor at *A…

  8. @Kajetan
    Half Polish territory is Germany. Before to occupy something more, consider first to return what is never belonged to you.

  9. NWE , you need to learn history, only because Germany took over some Polish land does not make it German.

  10. I agree that operationally we wont’ see much change. I also think that it’s extremely unlikely that Condor will apply to join Star Alliance. First, even LH, a founder member, does not have its low cost subsidiaries join Star, and second, LH would object very strongly to what it would see as a competitor joining Star.

    My guess is that most of the synergies will be found in bulk buying, either of aircraft or other supplies. Both are currently small to medium sized customers but will become substantially more significant and will demand greater discounts.

  11. Seems like a good solution and I really wish them the best. LH group needs some competition. I for one really like LOT’s business class and just booked LOT biz to MIA, SFO and LAX for three upcoming trips.

  12. Let’s skip the politics and focus on facts. Warsaw is not far from Munich or Frankfurt.Germany is Polish closest neighboor and biggest bussines partner.LOT extend the network in Asia and North America but skip all the leisure markets like Carraibean routes.
    It make sense – even very risky one for LOt to extend the network even farther.
    There is chance the LOT became a global airlines.Sometimes the impossible became reality even if you like or not.
    The government in Poland is absolutely horrible and undemocratic.Thats out of question.
    LOT really improved the flying experience.
    I’m flying often – at least 5-6 times per year. LOT has better economy sits and soft product on intercontinetal flights from British Airways and AirFrance.

  13. Darauf einen Polackenkaffee. LH probably couldn’t buy due to antitrust reasons, so they send in their polish proxies.

  14. Comments like this:

    “NWE says:
    January 24, 2020 at 9:08 am
    @Kajetan
    Half Polish territory is Germany. Before to occupy something more, consider first to return what is never belonged to you”…

    are always ridiculous and inflammatory. Given that this week is the 75th anniversary of the liberation of Auschwitz makes it even more unacceptable. The person who posted this should be ashamed of him/herself.

  15. Seat1c – I’ve always found that stance bizarre (for any event). If it was only the 74.5th anniversary, would it matter less?

  16. Agree with Callum

    @Seat1C You should take a look at an European XIX century map… Most of actual Polland territory belongs to Germany before WWI and WWII. After those wars Germany had to hand over territory to Polland.

    Having said that… It doesn´t mean than Polland should turn loose any territory

  17. @Mark @Casper
    You are right that LH does not financially own LOT.
    But LOT uses M&M as its reward scheme (not just being a Star Alliance partner)
    This suggests that LOT is likely to do what LH suggests.
    Can anybody provide an objective analysis of this?

  18. @Jack
    I am aware of history because it was studied in the secondary school.
    @Seat1C
    Zero shame. The liberation of Auschwitz is not on my celebration list. Neutral. History started earlier than your mentioned event, get some education about geography.

  19. @Seat1C, Jack

    You both are indeed mistaken, while not relevant to the article, vast areas of Poland belonged to Germany and it’s predecessor states for the longest of times. So especially Jack, maybe you should learn history first.

  20. @luis

    That’s because Germany invaded Poland in the 16-18 centuries and occupied Western Poland. If you go back further, the Order river was the border for a long time.

    If you want to go back even further, most of East Germany was Polish. Berlin and Podstam were originally Polish/Slavic cities until the German Invaders came. Berlin means “swamp” in old Slavic as there were tons of seams around, while Podstam means “under the oak tree” in polish

  21. @Bagoly

    I think LOT using M&M is a way of cost savings. Rather than running their own program, it’s much cheaper to outsource it to Lufthansa.

  22. Gabriel Wilamowski, you start by saying: “Let’s skip the politics and focus on facts” and then you include your uninformed and silly comment about “government in Poland”. Everything OK? You are not aware that LOT was losing money prior to 2015, and was itself subject to takeover? It all changed when current government took over. Wystarczy nie kraść.

  23. Does anyone of you honestly think that LH didn’t have its finger in this? Lufthansa and LOT do actually have a friendly relationship and i’d bet they’re intertwined business wise more than we know.

    Lufthansa feeds into Condor’s long haul flights. LH is Condor’s biggest feeder, i don’t see that changing any time soon. But given LOT’s rather aggressive expansion, this could at some point become a twig in LH’s eye.

    Either way, Condor is in a friendly neighbor’s hand and you can be sure the german gov had to approve this first.
    I don’t see why Condor can’t join Star Alliance or atleast as a junior/sub-member….what’s the word is Star using for the non-full members? Yes that one.

  24. Alaska better work to expand the relationship versus end it. Really hard to see how their international partnerships can survive at this rate. I say that with dread as an AS loyalist.

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