A few weeks ago, German airline Condor announced that it will be cutting half a dozen transatlantic routes in the summer of 2025. There was more to the story that met the eye, and the cuts involved the unusual relationship between Condor and Lufthansa. While Lufthansa had won an early court victory against Condor, it looks like Condor might just be in luck, thanks to a ruling by the European Commission.
In this post:
The complicated Condor & Lufthansa relationship
There’s a lot of history between Germany’s two largest airlines, Lufthansa and Condor. When Condor was founded back in 1955, Lufthansa was actually a shareholder in the company, and the airlines cooperated closely. Lufthansa basically viewed Condor as its leisure partner.
Over time that changed, and in the early 2000s, Lufthansa sold its Condor shares to Thomas Cook. When Thomas Cook went out of business, Condor ultimately became independent.
It has been a really exciting several years for Condor, as the airline has evolved in an incredible way. For example, Condor has replaced its outdated Boeing 767-300ERs with Airbus A330-900neos, offering an impressive passenger experience. Furthermore, the airline has increasingly started competing more directly with Lufthansa in long haul markets, flying between Frankfurt (FRA) and major cities in North America, ranging from Los Angeles (LAX), to Miami (MIA), to New York (JFK).
Here’s the thing, though — Condor is kind of reliant on Lufthansa. Frankfurt isn’t actually a huge market independently (especially for a leisure airline!), but rather the reason it’s such a big aviation hub is because of the size of Lufthansa’s presence there.
Up until now, Lufthansa has provided feeder traffic for Condor, at specially negotiated prices. Condor largely fills its planes with passengers connecting to and from Lufthansa flights. In other words, if you’re flying from Rome to Seattle, Condor will sell you a ticket with the Rome to Frankfurt segment on Lufthansa, and the Frankfurt to Seattle segment on Condor.
So, why would Lufthansa agree to provide feeder traffic for Condor, its biggest competitor in the country? Well, because it has legally been required to do so. The government has required Lufthansa to provide this reasonably priced connectivity to Condor in order to ensure competition in Germany. For years, Lufthansa has been trying to get out of this arrangement, as you might expect.
Regulators take differing stances on this partnership
For years, Lufthansa has been in court trying to get the right to discontinue its feeder relationship with Condor. In late December 2024, the airline succeeded, as Germany’s Federal Court of Justice (BGH) ruled in favor of Lufthansa, and against Condor and anti-trust authorities.
On the surface, this meant that Condor was no longer entitled to preferential pricing on Lufthansa feeder flights. This would’ve had major implications for the carrier’s business model, and it’s why Condor started to slash some transatlantic routes.
However, Lufthansa’s victory didn’t last for long. Today (January 15, 2025), the European Commission has informed Lufthansa that it needs to reinstate its feeder agreement with Condor, at least as an interim measure. Why? Well, the European Commission is alleging that Lufthansa’s transatlantic joint venture (which also includes Air Canada, United, etc.) unfairly restricts competition, particularly in the Frankfurt to New York market.
For Lufthansa, this might be a case of “careful what you wish for,” and of winning the battle but losing the war. It seems that if Lufthansa chooses to end its feeder flight agreement with Condor, the airline will be looking at a lot more scrutiny for its transatlantic joint venture, and that’s definitely not something that Lufthansa wants investigated too closely, given that it’s arguably the most lucrative aspect of the carrier’s business.
Only time will tell how this plays out. Will Lufthansa just voluntarily keep the Condor partnership going, in order to avoid trouble with its transatlantic joint venture? Or will this be litigated endlessly, and could end with a victory for either party?
One thing I can say with certainty is that Lufthansa has a very dominant position in Germany, and that’s not good for consumers. Furthermore, competitors just haven’t had much luck in Germany, whether it’s global German carriers like airberlin, or European regional ultra low cost carriers, like Ryanair.
How could Condor move forward without Lufthansa?
A large percentage of Condor’s long haul passengers connect to or from Lufthansa flights. If Lufthansa were able to fully cut ties with Condor, it would be absolutely devastating for the airline. Yes, Condor is actually starting to operate more feeder flights, presumably in its biggest markets.
For example, the airline will fly from Frankfurt to places like Berlin (BER), Milan (MXP), Prague (PRG), Rome (FCO), and Zurich (ZRH). But even that won’t fully make up for the amount of connectivity lost.
Condor is cutting six transatlantic routes specifically because of the initial court ruling. So obviously these were also the markets that were most dependent on connecting traffic from Lufthansa.
Condor is a really well run airline nowadays, and ultimately I trust the current management team would find a way to evolve, even if Lufthansa were able to cut ties with Condor.
Obviously transatlantic leisure demand is huge, but Americans usually want to visit Greece, Italy, and Spain, and not Germany. 😉 And interestingly for long haul flights, Condor seems to be much more popular with a US point of sale than a European point of sale.
Furthermore, as much as Condor is a well run carrier, ultimately German aviation just doesn’t have as low of a cost structure as some other European carriers, like Air Serbia, LOT Polish Airlines, and others, when it comes to serving connecting traffic. This is true in terms of airport fees, salaries, etc.
I still think Condor would benefit from continuing to expand its partnerships. For example, Condor’s growth in Seattle has been impressive, thanks to the partnership with Alaska. For that matter, Condor sure would be a great fit for oneworld, but I can’t imagine the existing European oneworld carriers would be down for it.
Bottom line
Condor and Lufthansa are in a heated dispute over the special relationship that the two airlines have. Condor has been reliant on Lufthansa for feeder traffic within Europe. Lufthansa hasn’t been happy with this arrangement for years, but it was required to ensure competition in the country.
While Lufthansa won a court battle to be able to no longer have this agreement with Condor, that victory was short lived. Now the European Commission has ruled that the partnership must continue for now, as it examines whether Lufthansa’s transatlantic joint venture limits competition in the market.
Only time will tell how this plays out, though it could get messy. In the meantime, the feeder flight agreement having to continue is good news for Condor and consumers.
What do you make of this major battle in German aviation?
Long shot , but does anyone have ideas on how long it will be until it’s reinstated ?
Trying to book travel for business and want to avoid 2 separate bookings ( condor from JFK to Frankfurt ) ( Lufthansa Frankfurt to Budapest )
Travel dates are rapidly approaching Jan 27th
This is fascinating. I always wondered why Lufthansa and Condor had these agreements. Although there are still struggles with delays, it seems that everyone I know has experienced better inflight service on Condor (economy or business) than on Lufthansa.
Likewise, I never knew that Virgin's largest feeder was British Airways. That may change as they forge closer ties with Air France/KLM.
Thank you for writing about such a curious topic. Once again, the pros...
This is fascinating. I always wondered why Lufthansa and Condor had these agreements. Although there are still struggles with delays, it seems that everyone I know has experienced better inflight service on Condor (economy or business) than on Lufthansa.
Likewise, I never knew that Virgin's largest feeder was British Airways. That may change as they forge closer ties with Air France/KLM.
Thank you for writing about such a curious topic. Once again, the pros and cons of regulation are one of the more fascinating parts of the airline business.
The agreement between VS and BA is similar to the LH/DE agreement. It was a regulatory requirement when BA took over bmi and thereby got their hands on many more LHR slots.
For connections through LHR from AMS, CDG, CPH, ARN and OSL they use AF, KL and SK, but for connections to non-Skyteam hubs they use BA.
Once LH has removed European feeder flights from Condor timetable, DE retimed their connections with other carriers, often also *A members. However, that rendered waiting at FRA uncomfortably long, except for some feeder flights on their own metal, as mentioned by Ben. So, are we back to square one, for the time being?
One curious thing... DE has removed several interesting NA destinations from their summer timetable, but uploaded a totally new destination in...
Once LH has removed European feeder flights from Condor timetable, DE retimed their connections with other carriers, often also *A members. However, that rendered waiting at FRA uncomfortably long, except for some feeder flights on their own metal, as mentioned by Ben. So, are we back to square one, for the time being?
One curious thing... DE has removed several interesting NA destinations from their summer timetable, but uploaded a totally new destination in Panama...
The final straw was when Condor debuted a superior business class to LH. Many business travelers also use Condor.
This. Lufthansa is such a mediocre airline with very little value proposition unless you are based in FRA or MUC. I’d pick condor any day of the week over LH and I hope they continue to grow and succeed.
I don't understand the drama.
VS's largest interline partner is BA. They both need the connectivity.
What might be different is if LH was required to provide a lower than normal rate interline contract?
Yes, both for BA/VS as well as for LH/DE, there is a pro-rate interline agreement in place, allowing VS and DE to offer competitive fares.
Typically, BA and LH only receive a percentage of the ticket fare based on distance flown, so we talk about amounts like $30-$60 for an economy seat. (for business class customers, they connecting airline gets more of course).
These agreements are not very attractive when you only fly the short-haul...
Yes, both for BA/VS as well as for LH/DE, there is a pro-rate interline agreement in place, allowing VS and DE to offer competitive fares.
Typically, BA and LH only receive a percentage of the ticket fare based on distance flown, so we talk about amounts like $30-$60 for an economy seat. (for business class customers, they connecting airline gets more of course).
These agreements are not very attractive when you only fly the short-haul segments.
With regular partnerships, it typically works both ways. Look at AF/KL/DL; the revenue from the long-haul segments offsets the short-haul segments. It works fine when the balance long-haul/short-haul is nide.
For DE/LH (and VS/BA), LH and BA don't receive much money.
Condor should change their logo to better distinguish itself from LH, especially as their business product is better
It's hard to imagine that BA would allow Condor to join OneWorld. They're very happy being the 500lb gorilla and concentrating all their traffic through Heathrow. Finnair would probably object too, although they could conceivably increase their North American footprint with smart code sharing.
I can make condor a strong international airline
I have organizing capacity
If the airline contacts me
I shall help them to solve this
Problem once and for all
Condor has a better business class product than Lufthansa-proper.
And LH may be flying planes without a business class product period (at least for a time).
Following Lufthansa’s acquisition of ITA, watch Af-KL take a stake in Condor. If LH wants to take over an AF-KL market I’d expect there to be competitive consequences
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Aaron Guest
January 15, 2025, 4:44 pm
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Joost Guest
January 15, 2025, 7:27 pm
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ImmortalSynn Guest
January 15, 2025, 8:16 pm
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Ryan Guest
January 15, 2025, 10:20 pm
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3 more repliesOh... What an interesting prediction! I'm getting some popcorn ready if this happens!
I'm not sure Condor is such an interesting target. Their presence in Germany is limited and they'll always be smaller than Lufthansa. It's different from SAS, having dominant positions at CPH. OSL and ARN.
On the other hand, they could be a bit like Virgin, feeding the US Delta hubs from Germany.
For Condor, I wondered if DUS could be a nice long haul market. For years, LTU and later Air Berlin, flew long haul...
I'm not sure Condor is such an interesting target. Their presence in Germany is limited and they'll always be smaller than Lufthansa. It's different from SAS, having dominant positions at CPH. OSL and ARN.
On the other hand, they could be a bit like Virgin, feeding the US Delta hubs from Germany.
For Condor, I wondered if DUS could be a nice long haul market. For years, LTU and later Air Berlin, flew long haul from DUS which is now not even hosting a single transatlantic flight. Would it give them a competitive edge?
"I wondered if DUS could be a nice long haul market."
"DUS which is now not even hosting a single transatlantic flight."
You just answered your own question.
FRA is so close to DUS. Tough to make DUS work long haul when you have the 3rd or 4th largest long haul hub just an hour away by train (and AMS only a couple hours away).
As I said in the original article that you, Ben, wrote on this topic, Condor should take this case to the EU and the EU has been willing to take a different approach than German courts.
Condor might not win the battle long term but it does give them to restrategize and also to force a review of the competitiveness of the Star JV in markets where Condor is trying to compete, including NYC.
good news indeed