The airline’s creditors have approved the proposal to end the protective shield proceedings. And the Condorspitze definitely has reasons for its confidence.
DEven before the meeting on Thursday at the Messe Frankfurt site, Condor management was confident that the creditors would agree to the new restructuring plan without an investor and the termination of the holiday airline’s protective shield proceedings. They did that at noon. The reasons for the confidence of the Condorspitze are actually plausible: Condor’s liquidity is now secured by a long-term loan from the Kreditanstalt für Wiederaufbau with a total volume of 550 million euros. This loan enables the airline to not only survive the sharp drop in passenger numbers as a result of the corona pandemic and global travel restrictions, but also to dare to restart under corona conditions.
This is mainly possible because the airline with a long tradition now benefits from the fact that it was forced to restructure itself as quickly as possible before the Corona crisis due to the bankruptcy of its British parent company Thomas Cook. To do this, they use the protective screen procedure, a special form of insolvency law in which the management tries to reorganize under the supervision of a trustee.
From the point of view of the creditors who gathered at the Frankfurt exhibition grounds on Thursday, the chances are actually greater than ever to get something back from the outstanding debts. Among them are suppliers, service providers and passengers who may just want a replacement for a damaged suitcase, as a company spokeswoman said. The strict bankruptcy law, which includes the protective shield proceedings that Condor had entered, unfortunately does not allow goodwill even in small things.
In the meantime, Condor has an efficient and crisis-resistant cost structure that hardly any other airline currently has, the Condor spokeswoman continued. That was also due to the bitter circumstance of somehow getting out of the emergency that one got into through no fault of one’s own due to the bankruptcy of the British travel company.
In fact, Condor itself was actually profitable when the airline, which at the time was still headquartered in the Gateway Gardens district of Frankfurt, came under financial pressure due to its mother’s crisis. A first state aid loan was necessary, but it only had a short term. A takeover of Condor by the Polish aviation group PGL, the state parent of the airline Lot, promised rescue. With their help, Condor would have been able to settle the soon-to-be-due state loan of 256 million euros. But the purchase failed after the contract was signed due to the corona pandemic, which was already having a fatal effect on air traffic and which also hit the Polish aviation company heavily.
Finding a new investor was hopeless
The loan of more than a quarter of a billion was still open, and financial help was needed quickly if Condor was to survive. Finding a new investor on reasonable terms in the middle of the Corona crisis was hopeless. But then the federal government and Hesse made the 550 million loan possible for the Reconstruction Loan Corporation with a guarantee.
This enabled Condor to settle its first loan. The remaining 294 million euros are now available to Condor as a liquidity reserve in order to be able to offer successful tourist flights again for the next few years, even without an investor and under Corona conditions. The fact that the Condorians are pursuing this intention with great energy can also be seen from the fact that the holiday airline quickly added Cuba to its long-range destinations after the Foreign Office lifted the travel warnings for the country. Quite unusual in times when the number of infections is increasing in many other countries.
How quickly and consistently Condor has embarked on the austerity course under airline boss Ralf Teckentrup can be seen from the fact that the company headquarters has been in Neu-Isenburg since August 1st, no longer in Gateway Gardens. Condor used the advantages of the protective shield procedure. This gave Condor the opportunity to prematurely terminate contracts, including the one for the headquarters in Gateway Gardens. According to reports, the relationship between Condor and the owner of the property should have been strained anyway due to billing modalities.
Three million euros rental cost in Gateway Gardens
OFB Projektentwicklung GmbH and Groß & Partner Grundstücksentwicklungsgesellschaft had sold the Condor corporate headquarters to the HUK-Coburg insurance group. For Condor, the five floors and a training hall had been too big and too expensive for a long time. The contribution to cost reduction through the move to the new, smaller headquarters in an office building near the Neu-Isenburg train station is impressive: In Gateway Gardens, around three million euros per year in rental costs were posted, in Neu-Isenburg 700,000 euros, such as let the Condor spokeswoman know.
Despite all the austerity constraints, Condor, unlike its large competitor Lufthansa, has reached a comprehensive agreement with all social partners, which also demands concessions from the employees, but prevents job cuts and first of all ensures that all 4200 Condor employees on the ground and in the air Stay on board.