The owner of LOT Polish Airlines has agreed to buy Condor Airlines, a move that marks a major step forward in Poland’s ambition to play a larger role in the European aviation market. The deal, announced on Friday, will see Polish Aviation Group (PGL) acquire full ownership of the former Thomas Cook Group for a non-disclosed sum.
“The offer to acquire Condor submitted by PGL has been selected as the most attractive for Condor, its employees, partners, suppliers, and customers,” the companies said. Der Spiegel last week reported Condor was in takeover talks with LOT, U.S. investment fund Apollo Global Management, and UK private investment company Greybull Capital.
According to the companies, PGL’s investment will allow Condor to “fully repay” the €380 million German government-backed bridging loan it received in autumn last year following the bankruptcy of British travel group Thomas Cook. The European Commission in October green-lighted the rescue loan, reasoning the measure would help ensure the orderly continuation of flights, though Frankfurt-headquartered Condor needed to demonstrate its liquidity needs on a weekly basis. Germany committed to ensuring that, after six months, Condor will either fully repay the loan or it will carry out a comprehensive restructuring to return to viability in the long-term. Condor CEO Ralf Teckentrup told German media today the company would repay the loan on time, by April 15.
“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,” said PGL president and LOT CEO Rafał Milczarski. “We want to develop Condor’s iconic brand in Germany and also introduce it to other markets in Europe,” he added.
State-owned PGL formed late last year as the country’s aviation companies (LOT, LOT Aircraft Maintenance Services, LS Airport Services, and LS Technics) came under the same umbrella. It operates under a common management center and acts also as an advisor for the construction of a new mega-hub airport in Warsaw, which ultimately will have four runways and a capacity to accommodate 100 million passengers annually—approximately five times the capacity of Warsaw’s Chopin airport.
Condor and LOT together “will serve twice as many passengers, thus forming one of the largest aviation groups and the leading leisure airline group in Europe,” asserted Teckentrup. In 2019, LOT carried more than 10 million passengers while Condor carries around 9.4 million passengers annually from eight German airports to around 90 destinations in Europe, Africa, and America.
The parties expect the transaction to close by April 2020.