Photo Source: @Condor.com
The European Commission has approved, under EU State aid rules, Germany’s plans to grant a temporary 380 million euros loan to charter airline Condor.
According to the Commission, the measure will contribute to ensuring the orderly continuation of air transport services and avoid disruptions for passengers, without unduly distorting competition in the Single Market.
The airline faces an acute liquidity shortage following the entry into liquidation of its parent company, Thomas Cook Group. Furthermore, Condor had to write off significant claims against other Thomas Cook Group companies, which it will no longer be able to collect.
Photo Source: .thomascookgroup.com
Condor’s provisional administrator Lucas Flöther welcomed the Commission’s decision: “Condor [now] has the necessary liquidity to bridge the winter season and continue business operations in full. The Condor management will now work out a restructuring plan in order to use the shielding procedure to align and set up Condor for a future without Thomas Cook. This plan is then to be adopted in the proceedings opened, which are expected to begin in December,” he said.
Meanwhile, Condor’s flight operations continue as planned.
The Commission’s guidelines on rescue and restructuring aid allow Member States to support companies in difficulties, provided, in particular, that the public support measures are limited in time and scope and contribute to an objective of common interest. Rescue aid can be granted for maximum six months to give a company time to work out solutions in an emergency situation.
In the present case, the Commission has taken the following elements into account:
- The loan will be paid out in installments under stringent conditions. In particular, Condor has to demonstrate its liquidity needs on a weekly basis and new payments will only be paid when all existing liquidity has been used and,
- Germany is committed to ensure that, after six months, the loan will either be fully repaid, or Condor will carry out a comprehensive restructuring in order to return to viability in the long-term. Such possible restructuring would be subject to the Commission’s assessment and approval.
