Lufthansa’s Ridiculous Attack On LOT Over Condor Acquisition

Filed Under: LOT, Lufthansa

Lufthansa is continuing their attack on LOT Polish Airlines, following LOT’s acquisition of German leisure airline Condor. Lufthansa’s argument is oh-so-ridiculous and oh-so-Lufthansa.

LOT’s takeover of Condor

In late January 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.

Personally I think LOT’s takeover of Condor is the best case scenario for consumers, especially when you consider that Lufthansa was also allegedly interested in a Condor takeover:

  • LOT plans on maintaining Condor’s base in Germany, which is a win for German consumers
  • With LOT taking control of Condor rather than Lufthansa, there will actually be some competition, since a Lufthansa takeover of Thomas Cook would have been terrible for consumers

LOT is taking over Condor

Lufthansa’s issue with LOT’s takeover

Even though German authorities have approved LOT’s takeover of Condor, Lufthansa continues to object. As reported by FlightGlobal, Lufthansa is labeling this “dubious” state intervention that “distorts competition.”

LOT Polish Airlines is government owned, so the purchase is being financed by the government (as one would expect for a government owned airline).

However, Lufthansa argues that LOT “no longer has a sustainable business model” and has “been kept flying by governments.” Lufthansa argues that “Poland has helped its state airline back on its feet several times.”

Of course many airlines have received government assistance, including most US airlines. Lufthansa argues that on a one-off basis government involvement is okay for crisis intervention, but argues it’s problematic when state intervention becomes the rule.

Lufthansa is arguing that the Polish government is giving LOT “permanent survival assistance.”

For what it’s worth, LOT has grown significantly in recent years, and in 2018 the airline reported a 50 million EUR operating profit. While the airline isn’t making huge amounts of profit, they’ve grown like crazy, and sure are doing better than the likes of Etihad.

Lufthansa takes issue with LOT being government owned

Government owned airlines are bad for the environment

This is where it gets good. Lufthansa argues that LOT being government owned doesn’t just distort competition, “but also harms the climate.”

Lufthansa argued that for government owned airlines, “state money is being used to fuel the price war in the skies and low-cost flights are being indirectly supported.”

Keep in mind Lufthansa has also used this argument about cheap flights being unethical for airlines that aren’t government owned, including EasyJet and Ryanair. The airline has argued that selling flights for less than 10EUR (~11USD) is “economically, ecologically, and politically irresponsible,” and that “flights for less than 10EUR shouldn’t exist.”

Essentially Lufthansa argues that most flights other than those operated by Lufthansa are bad for the environment… how convenient!

Government owned airlines and Ryanair are bad for the environment, apparently

Lufthansa’s solution? More consolidation!

What is Lufthansa’s solution to government owned airlines and climate change? More consolidation, of course. Government owned airlines “prevent the consolidation of the industry that is so necessary in Europe.”

That’s right, because Air France-KLM, IAG, and Lufthansa Group don’t have enough market share!

Ideally Lufthansa just wants to run the whole industry

Bottom line

Frankly I find Lufthansa’s senior management team to be among the least likable of any major airline. The airline suggests that what Europe needs more of is consolidation — what’s bad for competition is government owned airlines, and not virtual monopolies.

Lufthansa also argues that government owned airlines and non-government owned ultra low cost carriers are bad for the environment.

I can appreciate that Lufthansa’s management is looking out for the best interests of the company, but the extent to which they make moral arguments that justify their actions while attacking the actions of other airlines is quite something…

Comments
  1. There are rumours by serious German press, that the current situation could tip the deal.
    Also LOT would under EU law not be allowed to receive state aid once more.
    So in the end probably LH will take over and indirectly benefit from these aids again.

  2. Hmmm echoes of 1939 Lufthansa? Germany doesnt have a happy history with threatening Poland.

  3. @Schnubbi the Polish Government for a few years has been rebelling against the EU when it comes to its “laws” I don’t think they’ll just instantly stop funding LOT just because the EU says so.

  4. Lufthansa doesn’t like competition. They like to takeover competitors and take them out of the market.

    Alitalia has been receiving government support for several years yet the EU has done ZERO about that.

    With CO-VID19 …. I’d say all airlines will be receiving government support at some point including Lufthansa.

  5. ONEWORLD, LOT and Condor need to come to ONEWORLD. ONEWORLD needs LOT and Condor, LOT and Condor need ONEWORLD.

  6. @Matthew, how convenient, if you run out of arguments, or you don’t really have anything to say, just make a Nazi remark, usually does the trick.

  7. Lufthansa should be the last airline to preach about climate harm. They’ve been running one of the biggest fleets of a340s and other fuel inefficient aircraft compared to any major airline for the longest time.

  8. @DTS– So, that makes you either in denial, or, non appreciative of factual history. Which is bound to be repeated if not studied. Or at least read once. Sounds Trumpian to me.

  9. @As The A340-600 is not significantly more inefficient than an 777-200ER. It only has far higher maintenance costs due to having more engines.

    Lufthansa is trying to paint a picture where a) all competitors receive state help and b) Lufthansa is severely hit by the Coronavirus that Lufthansa also deserves state help. That’s their strategy to try to profit from the current events.

  10. When LOT acquires a small German leisure airline, Lufthansa start acting like a petulant child crying and complaining. But when IAG acquires the much larger Air Europa, Lufthansa hardly squeaks. Lufthansa like to pick on smaller rivals a lot. I’d love to see how much Lufthansa would complain if IAG acquired Norwegian for example.

  11. Why is everybody crying. It’s called capitalism. LH is not going to tolerate LOTs push into their very own turf. Thats what the big ones always do, sometimes using smart arguments and sometimes with stupid ones.

  12. This is rubbish! Air Berlin and Lufthansa were looking in the past to have LOT go into bankruptcy so they can purchase it and be in control and that would be ok right? That never happened and LOT still exists while Air Berlin disappeared. But its not ok for a Polish airline to purchase a bankrupt German airline and save it from liquidation right? I don’t see anything wrong with what LOT is doing. Lufthansa is also in a legal battle with LOT over creating a new airline livery that looks similar to LOT’s and LOT was the one that had this livery first a few years before Lufthansa decided to remake theirs. Shame on you Lufthansa for creating all this rubbish, especially with a fellow Star Alliance member!

  13. I don’t think LOT to join in One World is a good idea while BA has a very strong presence in both Western and Eastern Europe. Anyway, who can argue with Germans after all? Let them dig own holes, like in 1945….lol

  14. @Mark Fischer you’re SO right. I think back to some of the previous LH CEOs and am incredulous that this is the best the LH BOD could come up with.
    What’s deliciously ironic is that LH has recently started to wail for state aid becuase of the COVID-19 virus. Do as I say not as I do anyone?

  15. This same mediocre airline PAID for a 5* rating from SkyTrax is now preaching environmental and business ethics! Really?? I hope your balance sheet gets screwed by LOT.

  16. @Steve: I am pretty certain I know enough about the period between 1933 and 1945. I actually visited Wolfschanze and shed tears in Stutthoff.
    To compare any capitalist endeavors by a global player in aviation, that happens to be German, against a smaller competitor, that happens to be Polish, with anything that happened during the Nazi crimes in Poland and the rest of the world is simply disgusting and ignorant, anyone who does not call that out sound Trumpian to me.

  17. Give the Germans a break. The current generation had nothing to do with WW2 and isn’t particularly proud of the Nazi legacy.

    Having said that, I hope the Poles do a good job with Condor; my experiences with that airline were abysmal. A little competition goes a long way.

  18. First of all: stop the WW2 shit. It’s irrelevant and not helpful.
    I am Polish, and my grandfather was killed in Stutthoff. I know what Germany and Russia did to Poland after 1939.
    But we are discussing airline business !!!!
    No need to resort to such immature arguments. Just stop it.
    If you believe that “big, ugly” LH would like to dominate smaller competitors, this view is not unjustified. Just look at Austrian and Swiss. And yes, a few years back, there was a plan to sell LOT to LH.
    But please, do not resort to dredging out the horrors of Nazi Germany to strengthen your argument.

  19. Good on LOT it’s great to see them expanding. Lufthansa need to back off. They seem to like to throw around all this false information in the hopes that the public will believe there lies. I’d much rather support Poland and LOT than a crappy airline that has to pay skytrax for a 5 star rating when really in reality they only deserve 2 stars !

  20. @ BEN . . . . i’m glad you write about the Airline you grew up with.
    Yes, it is a BIG shame on the entire LUFTHANSA-Group and also there biggest Gangster Carsten Spohr.
    Such an old and so far ok run airline, but maybe with PGL trying to get into the market of LUFTHANSA-Group a bit faster as that Airline Group from Frankfurt could.
    I was never a big fan of CONDOR, but i sure hope LUFTHANSA will get a huge rival out of this deal one day!!! Let’s hope that Corona Virus Stress will not tear some of them apart before it’s over?

  21. Lufthansa is talented in buying out other airlines, which may backfire very soon do the crisis we will go trough..
    They should rather focus on being competitive and provide service like Emirates does !
    Why would customers pay $ 200-300 more for a ticket in compare to the competition when the airline try to safe $1 on your meal !

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