The announcement brings to a relatively swift end the shielding procedures implemented by Condor following the collapse of Thomas Cook Group in Sep-2019. Since then, Condor has not remained idle. The carrier is continuing its route development with eight new routes from Berlin Schoenefeld to open in summer 2020, a number of other short haul leisure routes from other bases in Munich, Leipzig, Hamburg and Duesseldorf, as well as long haul routes from Munich to Halifax and Seattle and from Frankfurt to Edmonton and San Jose.
Condor is also launching a new short and medium haul business class product in summer 2020. Business class will enjoy lounge access, free middle seat in the front rows of the aircraft, complimentary food and beverage options, additional hand and checked baggage, free sports baggage and many other advantages.
The German carrier has also successfully negotiated the first stage of restructuring with cabin crew union UFO. Under a new collective agreement, around 150 full time positions will be cut. This would have no doubt been welcome news for investors as the carrier looks to improve its EBIT margin to 8% in the coming years.
Condor avoids the fate of airberlin and Germania, and the support it received from the German government and its swift takeover by LOT is perhaps indicative of less lucrative Berlin leisure and long haul markets where these two were based, compared to Condor's catchments in Munich, Dusseldorf and in particular Frankfurt from where its long haul operations to the Americas are focused.
MAP - The Condor network currently spreads to over 40 markets and stretches east into Asia, west into the Americas and south into Africa
Source: CAPA - Centre for Aviation and OAG
LOT's plans for Condor are vague thus far, however there are some conclusions to be drawn. First and foremost, by all accounts Condor will retain its brand, and LOT will even look to expand it in Germany and elsewhere in Europe. LOT's CEO, Rafal Milczarski, commented that the acquisition "fits perfectly into PGL's strategy", adding that PGL will not reduce Condor's workforce further but rather aims to increase staff to expand Condor's presence both in Germany and to other European markets.
Mr Milczarski has alluded to the fact that Condor's 767 fleet will be phased out in the next two to three years. Condor's 767 fleet age is a tick over 24 years old, according to the CAPA - Centre for Aviation Fleet Database, with close to 17,000 cycles flown on average. Mr Milczarski said as many as 20 long haul aircraft could be incorporated into Condor's fleet and that LOT will order "another 10 long haul aircraft" for itself, potentially additional 787-9s.
CHART: Condor's fleet includes a mix of narrowbody and widebody types with an average age of over 20 years
Source: CAPA - Centre for Aviation Fleet Database (as at 27-Jan-2020)
Condor's 757-300 fleet is even more outdated and may be another candidate for renewal in the medium term with additional A321-200s, or new A321LRs/XLRS or 737 MAXs. Having Condor will also give LOT impetus for a bulkier order with OEMs as it also considers these narrowbody types for its own short haul fleet, which apart from seven 737 NGs and 12 MAXs on order, is comprised of Embraer regional jets.
Mr Milczarski also spoke of "synergies" between the two carriers, possibly referring to LOT's 787 equipment, of which it has a mix of 787-8s and -9s, meaning you could presume these additional 20 long haul aircraft planned for Condor may likely be this same aircraft type.
The takeover will be concluded in Apr-2020, and is slated to create "one of the largest aviation groups and the leading leisure airline group in Europe", handling about 20 million passengers per annum combined, according to Condor's CEO Ralf Teckentrup.