Lufthansa deals blow to Thomas Cook over Condor acquisition

Lufthansa has cooled on acquiring Thomas Cook’s German airline Condor in a blow to the travel group’s plans to restructure.

The Lufthansa Group confirmed it had made a non-binding offer for Thomas Cook’s German carrier last month – the only carrier to confirm bidding for one of Thomas Cook’s airlines although Cook has said it is considering seven offers.

However, Lufthansa chief financial officer Ulrik Svensson downplayed the chances of Lufthansa acquiring Condor this week.

He told analysts: “It’s unlikely we will get the deal.”

Svensson said it would be “complex” to integrate Condor with Lufthansa’s Eurowings subsidiary as the group previously planned.

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He also described Condor’s fleet as ageing and in need of “high investment”.

Svensson was responding to criticism from analysts, one of whom told Lufthansa: “Further acquisitions have to be off the table.”

Thomas Cook needs to secure buyers for its carriers by the end of September to secure £300 million in additional funding from its banks to carry it through the winter.

The troubled group put its airlines in Germany, the UK and Scandinavia up for sale in February and confirmed the receipt of offers late last month.

Lufthansa chief executive and group chairman Carsten Spohr confirmed the German group had bid for Condor in early May, with an offer to extend this to Cook’s other airlines.

He told shareholders then: “We believe we can offer Condor good prospects and maintain the business as a whole, both long and short-haul operations.”

However, Lufthansa announced a turnaround strategy at low-cost subsidiary Eurowings – with which it planned to combine Condor – this week, dropping Eurowings’ long-haul flying and cutting its short-haul expansion in order to stem losses.

Lufthansa had until now seemed the most likely purchase of Condor, having owned the leisure carrier in the past.

It was a joint founder of Condor in the 1950s and remained a joint shareholder when the German airline and tour operator business Condor & Neckermann (C&N) acquired Thomas Cook in 2000.

C&N subsequently rebranded as Thomas Cook while retaining the airline and tour operator brands in Germany.

Lufthansa only sold its remaining stake in Condor to Thomas Cook in 2009.

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