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Germany Prepares to Nationalize Condor Airlines

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The German government is reportedly preparing to take over Frankfurt-based Condor Airlines, since a previous plan for Polish Aviation Group (PGL)—parent company of LOT Polish Airlines—to purchase the carrier appears likely to fall through.

Condor was formerly part of the Thomas Cook Group, prior to that company’s collapse in September 2019, and was rescued at that time by a €380 million (USD $415 million) state bridging loan.

In January 2020, LOT agreed to buy Condor for about €300 million (USD $328 million), combining the leading carriers to create a European aviation group capable of flying over 20 million passengers per year.

However, the unanticipated, unprecedented effects of the current coronavirus-outbreak” target=”_self” rel=”nofollow noopener noreferrer”>COVID-19 pandemic on the global aviation industry may make the planned takeover impossible. Inside sources told Reuters that PGL has made the completion of this transaction contingent upon certain guarantees to which the German government will not agree.

With most fleets grounded, yoked by strict travel restrictions aimed at containing the coronavirus’ spread, and consumer fears fueling a steep decline in demand, airlines around the world are struggling to stay afloat unless they receive financial aid from their respective governments.

The International Air Transport Association (IATA) lately released a report, which estimates that airlines will lose $252 billion in overall revenue this year as a result of the global health crisis. IATA Director General and CEO Alexandre de Juniac posited that most air carriers will soon go bankrupt without swift government bailouts and has urged the provision of state-funded assistance to prevent the total collapse of the air travel industry.

Just last week, Condor reportedly applied for an extra €200 million (USD $220 million) in state aid in order to maintain operations. At present, no final determination has been reached regarding the imperiled carrier’s immediate future, although sources said that the government’s decision could come sometime this week.

Should Germany end up nationalizing Condor, sources said that its ownership of the airline would only last for a limited time and that Germany would want to restart the sales process as soon as the travel industry rebounds from the coronavirus crisis.

For more information, visit condor.com.

This post was published by our news partner: TravelPulse.com | Article Source

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Airline News

New United CEO Scott Kirby Comes Out Firing

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United Airlines’ Scott Kirby, who took over as CEO last week in the wake of Oscar Munoz’s retirement, is wasting no time establishing his authority.

Kirby cut 13 high-level executives in a cash-saving move on Friday as the coronavirus pandemic has throttled the industry financially. A day earlier, he told an online investor conference that the airline absolutely would not declare bankruptcy, and that he thought flying was safe enough to not block the middle seats on planes from being sold.

Well, he did build a reputation as an open – some might say abrasive – executive while at American Airlines.

Kirby is eliminating 13 of United’s 67 officer positions, all effective on Oct. 1. That’s the day after the restrictions on firing employees runs out per the federal government’s rules for airlines accepting billions of dollars in stimulus package grants and loans.

“While there are glimmers of good news in our July schedule — we expect to be down about 75% versus 90% right now — travel demand is still a very long way from where it was at the end of last year and the financial impact on our business remains severe,” United said in a written statement as reported by CNBC.

The cuts are in response to the loss of nearly 90 percent of business for United and all airlines, as the demand for travel has dropped dramatically compared to last year and beyond.

But Kirby defiantly said during the investor conference a day before that he has no plans for the airline to go bankrupt.

“Zero percent, no chance,” Kirby said. “It’s worse for shareholders. It’s worse for creditors. It’s worse for employees. It’s worse for every constituent that we have.”

To that end, Kirby also said he won’t sacrifice potential sales by blocking middle seats, as some airlines have done. As the blog The Points Guy noted, Kirby said the airline’s cleaning process, air circulation and a requirement for passengers and crew to wear face masks make it a safe experience.

“Airplanes don’t have social distancing — we’re not going to be six feet apart,” he said. “But an airplane environment is incredibly safe.”

This post was published by our news partner: TravelPulse.com | Article Source

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