Thomas Cook hits stumbling block over Condor/Air Berlin merger
Competition authorities have raised concerns regarding the merger of Thomas Cook’s airline, Condor, with Air Berlin.
Speaking to analysts today, Thomas Cook Group chief executive Manny Fontenla-Novoa admitted it has been in discussions with authorites after they expressed concern about the merged airline’s strength on travel from Germany to Majorca.
“We’ve had some dialogue, formal and informal, but early indicition is we still remain confident this will be approved at the back end of January, early February. We are working very hard with them,” he explained.
“Air Berlin is strong from Germany into Majorca and our tour operation is very strong into Majorca and we can understand why they are concerned, but we think we will be able to demonstrate that consumers in Germany have many choices to fly into Mallorca.”
The deal, announced in September, would add Condor’s 35 aircraft – nine of which operate long haul – to the combined Air Berlin/LTU fleet of 131 aircraft, 11 which fly long haul.
Condor carries more than seven million passengers a year with 40% of sales coming through Thomas Cook tour operations in Germany.
Third party operators make up 24% of Condor’s sales while the remaining 36% is sold direct to seat-only passengers.
Condor serves 78 destinations and is run at arm’s length from Thomas Cook’s tour operations in Germany, meanwhile Air Berlin carried almost 20 million passengers last year.
The deal is expected to bring 70 million euros in “synergies” by 2010.
Thomas Cook will receive Air Berlin shares worth up to 475 million euros and will have representation on the airline’s board from 2009.
The deal will also reduce Thomas Cook financial debt by 185 million euros and pension obligations by 266 million euros.
By Bev Fearis
Bev
Editor in chief Bev Fearis has been a travel journalist for 25 years. She started her career at Travel Weekly, where she became deputy news editor, before joining Business Traveller as deputy editor and launching the magazine’s website. She has also written travel features, news and expert comment for the Guardian, Observer, Times, Telegraph, Boundless and other consumer titles and was named one of the top 50 UK travel journalists by the Press Gazette.
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