LOT’s Condor Deal Withdrawal Legal Saga Has Ended

The legal saga between Condor and Polish Aviation Group (Polska Grupa Lotnicza), which owns LOT Polish Airlines, is over. A Frankfurt court has ruled that PGL does not have to compensate Condor for pulling out of purchasing this German airline. Let’s take a look at the details.

PLG pulled out in 2020

In January 2020, it was announced that PGL (Polska Grupa Lotnicza) would be purchasing German airline Condor following its split from Thomas Cook in 2019 after its bid was selected among the submitted offers.

Condor and PGL signed an investment agreement on 24 January 2020, under which it was agreed that the purchase would be completed by 31 March 2020.

However, in April 2020, it was confirmed that PGL had pulled out of the sale due to the global uncertainty in the aviation industry brought about by COVID-19. Simple Flying reported on the news at the time, quoting a PGL spokesperson as saying:

“I confirm that PGL informed Condor today about its withdrawal from the purchase of this company.”

At the same time, Condor responded by saying:

“We can confirm that PGL has informed us that it wishes to withdraw from the purchase. We are currently in discussions with PGL to define possible conditions for a withdrawal. We are also examining how we will assert our claims under the signed purchase agreements. Condor is prepared for this scenario and intends to leave the protective shielding proceedings soon.”

LOT and Condor would have handled 20 million passengers annually. Photo: Getty Images

PGL’s purchase of Condor would have cost it €500 million. Over half of this sum was set aside for the repayment of a bridge loan granted by the German government and the authorities of the state of Hesse.

The company had hoped that LOT and Condor together would act as one of Europe’s biggest aviation groups. The plan was for the group to carry 20 million passengers a year.

Condor sued quickly

Condor reacted quickly, suing PGL for pulling out of the purchase. It was suing for €56 million in compensation. The case was heard by a Frankfurt court as Condor is based in a town that is part of Frankfurt’s regional authority.

The court rejected Condor’s claim in full. Condor has not appealed, so the case is now closed.

Lufthansa must cooperate with Condor. Photo: Getty Images 

Condor is no stranger to pursuing its interests through law: earlier this month, Simple Flying reported on the German Federal Cartel Office banning Lufthansa from ending its agreement with Condor which forces the two airlines to cooperate.

The cartel office considers that Lufthansa holds a dominant position in Germany, and so it has to fulfill special obligations towards other market participants, one of which is Condor. As a result, Condor has access to some of Lufthansa’s booking classes and is able to make use of its feeder flights.

What do you think of Condor suing LOT’s owner, Polska Grupa Lotnicza, for pulling out of the purchase? Do you think PGL was right to be cautious in 2020? Let us know what you think of this story in the comments below.

Source: Dziennik Gazeta Prawna