BERLIN (Reuters) – Germany will guarantee a 380 million euro ($418.6 million)bridging loan for Condor, the German airline owned by insolvent British travel operator Thomas Cook, to enable it to continue flying and save jobs, the economy minister said on Tuesday.
The airline, which is profitable, had said on Monday it would carry on its operations and that it would ask the German government for a bridging loan despite its parent company’s collapse. It is a separate legal entity from Thomas Cook.
“Condor is a profitable company and therefore our decision was based on economic factors, not on political criteria,” said Peter Altmaier, adding that the decision meant many of the firm’s roughly 5,000 workers would be able to keep their jobs.
Altmaier, who said the aid was subject to EU approval, added that the plan would help the 240,000 travelers from Germany who are still on holiday to return home.
The state of Hesse, where Condor is based, said it would participate with 190 million euros in financial support.
“We will soon make an application for protection proceedings,” said Condor Managing Director Ralf Teckentrup. That would enable a speeding financial reorganization.
The goal is for Condor to undertake insolvency proceedings under self-administration to avoid being entangled in the winding up of Thomas Cook’s financial affairs.
Condor expects earnings before interest and tax to rise in the current financial year ending Sept. 30 from about 43 million euros previously.
Deputy economy minister Ulrich Nussbaum said Condor could become a healthy company and an investor could be found so that the state would get its money back.
The German move contrasts with the actions of the British government, which opted against bailing out Thomas Cook. A British minister said earlier it would have been a waste of taxpayers’ money to throw good money into a business that was not meeting the needs of its customers.
Thomas Cook had around 600,000 customers abroad when it collapsed in the early hours of Monday morning and some 16,500 were flying back to Britain on the second day of the biggest- ever peacetime repatriation.
($1 = 0.9078 euros)
Reporting by Holger Hansen, Klaus Lauer and Ilona Wissenbach, Christian Kraemer and Madeline Chambers; Writing by Madeline Chambers; Editing by Jane Merriman and Dan Grebler