Thomas Cook offloads Condor to Air Berlin
Thomas Cook is to merge its German airline Condor with low cost carrier Air Berlin.
The deal further expands Air Berlin following the recent takeover of LTU in Germany.
The arrangement will 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 expanded Air Berlin will be a long-term strategic partner to Thomas Cook and will continue to porvide the operator with flight capacity.
The deal is expected to yield 70 million euros in “synergies” by 2010. Thomas Cook will receive Air Berlin shares worth as much as 475 million euros and will have representation on the airline’s board from 2009.
It will also reduce Thomas Cook financial debt by 185 million euros and pension obligations by 266 million euros.
Thomas Cook joint chief executove Manny Fontenla-Novoa said: “As a significant shareholder in Air Berlin we will be able to benefit from the strong market position, growth potential and significant synergies expected from the combined group.
“Air Berlin will remain a long term strategic partner for Thomas Cook providing us with continued access to flying capacity and a foothold to launch into the German independent travel market.”
He said the combination of the two airlines creates a “formidable competitor” among German airlines and creates one of the leading low fare airlines in Europe.
Fontenla-Novoa described the move as being a “significant step in the realisation of our asset-light strategy, which aims to reduce risk and maximise flexibility”.
It would “generate significant value for Thomas Cook shareholders while securing a long-term future for Condor and its people”.
by Phil Davies
Phil Davies
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