Why British pilots are clear about Germany's Condor Bailout
Pilots in the United Kingdom have expressed outrage at the German government's rescue of Condor. Is this a case of jealousy or do the pilots have a point?
The British Airlines Pilots Association (BALPA) is the umbrella association representing pilots in the United Kingdom.
BALPA Secretary General Brian Strutton made a statement: [19659004] Congratulations to Condor's employees and customers. But with British holidaymakers stranded and 9,000 employees out of a job, Thomas Cook's directors must explain why the British airline had to be shut down, but the German was allowed to continue operating. How was it funded because it looks like there's nothing left in the coffin for UK employees? And why couldn't the British government provide the same kind of bridge building as the German government when it was known that Thomas Cook had a Chinese buyer lined up? It is 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 deducted from that division to keep the entire 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 prevented from seizing Condor's assets to meet Thomas Cook's debts.
Keep in mind that Condor was not a wholly owned subsidiary of Thomas Cook. Instead, Thomas Cook had a 49% stake.
So while it is understandable that British pilots are furious, their immediate ire is best directed at the British Government, who chose not to bail Thomas Cook, rather than Thomas Cook himself and Condor in particular. But in the long run, it was Thomas Cook's poor merger in 2007 with MyTravel that finally judged it.
CONCLUSION
The age of "high street" travel agencies seems such a relic of the past. That Thomas Cook lasted so long is a testimony to the strength of the brand. But staggering debt service from poor investment choices ultimately convicted the airline, not Condor, who spread the wings.
image: Thomas Cook
