Why UK Pilots Are Livid Over Germany's Condor Bailout - Matthew Klint

Pilots in the United Kingdom have expressed outrage over the German government’s bailout of Condor. Is this a case of jealously or do the pilots have a point?

The British Airlines Pilots Association (BALPA) is the umbrella union representing pilots in the United Kingdom.

BALPA General Secretary, Brian Strutton issued a statement:

Good luck to the Condor staff and customers. But with UK holidaymakers stranded and 9,000 staff out of a job, the Thomas Cook directors need to explain why the UK airline had to be closed but the German one was allowed to continue to operate. How was it funded, because it seems there is nothing left in the coffers for UK staff? And why couldn’t the UK government give the same kind of bridging support as the German government when it was well known that Thomas Cook had a Chinese buyer lined up? It’s a national scandal.

The question is fair enough on the surface. If Condor was a profitable arm of Thomas Cook, why couldn’t money be pulled from that division to keep the whole company afloat?

The answer is because Condor, formally Condor Flugdienst GmbH, is an independent subsidiary. Thanks to swift action and the protection of German insolvency law, creditors were barred from seizing the assets of Condor to satisfy the debts of Thomas Cook.

Furthermore, keep in mind that Condor was not a wholly-owned subsidiary of Thomas Cook. Instead, Thomas Cook held a 49% stake.

So while it understandable that British pilots are outraged, their immediate ire is best directed at the British government, which chose not to bail out Thomas Cook, rather than Thomas Cook itself and especially Condor. Long-term, though, it was Thomas Cook’s ill-fated 2007 merger with with MyTravel that ultimately doomed it.

CONCLUSION

The age of “high street” travel agencies seems such a relic of the past. That Thomas Cook held on for so long is a testimony to the strength of its brand. But staggering debt service from poor investment choices ultimately doomed the airline, not Condor spreading its wings.

image: Thomas Cook

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https://liveandletsfly.boardingarea.com/2019/09/28/uk-pilots-condor/

2019-09-28 11:39:00Z
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