MIAMI – The German government is set to nationalize Condor (DE) as the deal between the carrier and Polish Aviation Group (PGL) seems likely to collapse in light of the current crisis.
However, neither DE, PGL nor the national administration has made a final decision as the German company said that it was in talks with the parties involved, also rejecting to comment further. Previously, it was expected that the arrangement would be finalized by April of this year.
DE – PGL purchase details
In January, LOT (LO), the airline of PGL, offered to buy DE for US$328m, but this week it was reported by Reuters that the Polish carrier was dealing with contingents on certain financial guarantees with which the government did not coincide.
During this alarming virus spread period, DE has been recognized for its busy repatriation flights, an endeavor in the eye of PGL as part of a strategy to create a European aviation group between the German airline and LOT to carry 20 million passengers per year.
The current state of the airline came after its owner corporation, Thomas Cook, which has a 49% stake in the carrier, collapsed in September 2019. By that time, DE asked for a US$415m rescue loan that was granted and with the arrangement that PGL would repay such debt.
But the financial situation became worse since then, as the carrier requested in the past week an additional US$200m in state aid to face the COVID-19 crisis.
The move by the German government is similar to Alitalia’s (AZ) nationalization after there was no purchase deal between the carrier and buyers as the deadline got near.
We still do not know what the outcome of the nationalization might turn out to be, but as IATA’s CEO states that half of the airlines will probably go bankrupt in the coming months, DE is likely to be taken over if it wants to survive what it is now becoming one of the worst crisis in commercial aviation history.