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Germany throws Thomas Cook-owned Condor a €380m lifeline

Jill Petzinger
Jill Petzinger, Germany Correspondent, Yahoo Finance UK
An airplane of Condor, the German airline subsidiary of Thomas Cook, landing on September 24, 2019 at Düsseldorf airport. Credit: Ina Fassbender/AFP/Getty Images

The federal government in Berlin on Tuesday evening approved a €380 m (£336 m, $418 m) six-month loan for German charter airline Condor, which belongs of the bankrupt Thomas Cook group.

The airline said it was now on the lookout for a new owner, who could be either a “strategic investor or a financial investor.”

Half of Condor’s loan was put up by the state of Hesse, where Condor is based, and the other half by the German government. Economy minister Peter Altmaier said the government is in talks with the European Commission, which needs to approve the loan.

“Since our liquidity was used up by our insolvent parent company for the seasonally weaker booking period, we need this bridge financing for the winter,” said Condor CEO Ralf Teckentrup. “The commitment is an important step in securing our future.”

Thomas Cook folded on Monday, after failing to secure bailout cash from Chinese conglomerate Fosun and a number of other firms. Its collapse has put 22,000 jobs at risk worldwide, of which 9,000 are in the UK.

Thomas Cook Germany also declared bankruptcy on Wednesday morning, leaving 140,000 holidaymakers in limbo. "We are currently in discussions with the Foreign Office, the travel insolvency insurer and other partners with the goal of enabling an orderly repatriation of the guests," Thomas Cook GmbH said in a statement.

READ MORE: Thomas Cook is dead and 150,000 UK holidaymakers are stranded

Condor said it was filing for insolvency protection, a procedure specific to German insolvency law, to protect it against any possible claims from its British parent company, noting that “this step is what’s best for our customers, our business partners and for us, because we gain full independence from the Thomas Cook Group plc and more security for our future.”

READ MORE: CAA sets up hotline amid claims Thomas Cook passengers 'held hostage' at hotels

Trade union Verdi, which had pushed hard for the loan, welcomed the government’s actions, noting since Condor was clearly profitable, everything possible should be done to preserve the almost 5,000 people it employs. “The financial situation of the parent company should not be allowed to affect Condor,” said Verdi’s Christine Behle.

Frankfurt-based Condor, was founded in 1956, and flies eight million passengers a year. The company’s reported operating profit of €43 m and turnover of around €1.8 bn in 2018.