Condor completes BK proceedings, LH cancels M&M cooperation & Feeders
Dec 7, 2020, 8:55 am
#1
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Condor completes BK proceedings, LH cancels M&M cooperation & Feeders
Without much fanfare DE completed their reorganization earlier this month: after going into protection in the fall of 2019 (after Thomas Cook went under) they are now debt free except for one long term loan with KfW, which now holds all assets of the airline as a security in a holding.
The deal with PGL is off, so the airlines survives but the required fleet renewal is on hold.
As the company is independent and no longer under BK protection, Lufthansa has given notice to DE and will no longer perform the feeders at a prorated fare (i.e. when feeding from BER or MUC to a FRA-ANC flight, LH only gets the fraction of the fare that is proportional to the total distance flown) but will ask for segment based pricing based on interline rates.
Also the co-operation between DE and M&M ends next year. It seems LH wants to clearly sever all ties and reset the relations...
The deal with PGL is off, so the airlines survives but the required fleet renewal is on hold.
As the company is independent and no longer under BK protection, Lufthansa has given notice to DE and will no longer perform the feeders at a prorated fare (i.e. when feeding from BER or MUC to a FRA-ANC flight, LH only gets the fraction of the fare that is proportional to the total distance flown) but will ask for segment based pricing based on interline rates.
Also the co-operation between DE and M&M ends next year. It seems LH wants to clearly sever all ties and reset the relations...
Dec 8, 2020, 4:19 am
#2
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I always wondered, and this might be little off-topic, what the interline rates are? eg specifically I am looking at things like GRU-BOG where C class is 2000usd but as part of F ticket LHR-FRA-GRU-BOG in F it all costs only 4000usd.
Dec 8, 2020, 6:55 am
#3
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Depends on the interline agreement 
In the case of your example, LH probably has a bilateral interline arrangement with AV in which AV gets a fraction of the base fare corresponding to the distance GRU-BOG in relation to LON-BOG. It evens out between LH and AV as LH probably feeds AVs gateway in Europe on a similar basis. If they don't agree, it defaults to the multilateral interline agreement, ie the IATA full fare list prices. MY guess is that in this case LH is probably asking for a renegotiation of the deal. Helping competition to feed into gateways is not unusual, LH feeds AA in MUC and FRA, AA feeds LH in CLT & MIA for example. Sometimes its a prorated deal based on distance, sometimes fixed price.
In the case of your example, LH probably has a bilateral interline arrangement with AV in which AV gets a fraction of the base fare corresponding to the distance GRU-BOG in relation to LON-BOG. It evens out between LH and AV as LH probably feeds AVs gateway in Europe on a similar basis. If they don't agree, it defaults to the multilateral interline agreement, ie the IATA full fare list prices. MY guess is that in this case LH is probably asking for a renegotiation of the deal. Helping competition to feed into gateways is not unusual, LH feeds AA in MUC and FRA, AA feeds LH in CLT & MIA for example. Sometimes its a prorated deal based on distance, sometimes fixed price.
Dec 8, 2020, 8:33 am
#4
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Depends on the interline agreement In the case of your example, LH probably has a bilateral interline arrangement with AV in which AV gets a fraction of the base fare corresponding to the distance GRU-BOG in relation to LON-BOG. It evens out between LH and AV as LH probably feeds AVs gateway in Europe on a similar basis. If they don't agree, it defaults to the multilateral interline agreement, ie the IATA full fare list prices. MY guess is that in this case LH is probably asking for a renegotiation of the deal. Helping competition to feed into gateways is not unusual, LH feeds AA in MUC and FRA, AA feeds LH in CLT & MIA for example. Sometimes its a prorated deal based on distance, sometimes fixed price.
In the case of your example, LH probably has a bilateral interline arrangement with AV in which AV gets a fraction of the base fare corresponding to the distance GRU-BOG in relation to LON-BOG. It evens out between LH and AV as LH probably feeds AVs gateway in Europe on a similar basis. If they don't agree, it defaults to the multilateral interline agreement, ie the IATA full fare list prices. MY guess is that in this case LH is probably asking for a renegotiation of the deal. Helping competition to feed into gateways is not unusual, LH feeds AA in MUC and FRA, AA feeds LH in CLT & MIA for example. Sometimes its a prorated deal based on distance, sometimes fixed price.
Jan 29, 2021, 1:08 am
#5
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It seems the Bundeskartellamt has opened an investigation if the cancellation of feeder services by LH is legal.
Jan 29, 2021, 4:59 am
#6
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It seems the Bundeskartellamt has opened an investigation if the cancellation of feeder services by LH is legal.
They are free to go under!
Jan 30, 2021, 2:56 pm
#7
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Using this criteria, nobody needs a Lufthansa, either. But we digress...
Jan 31, 2021, 12:25 pm
#8
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Using this criteria, nobody needs a Lufthansa, either. But we digress...
Jan 31, 2021, 3:42 pm
#9
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It's no secret that Lufthansa--pre-pandemic--continually lied about force majeures, most often didn't refund "taxes" which clearly should have been refunded, and refused to pay compensation in spite of customers' entitlement to such. I don't mean to excuse EW, but let's not sit here in the LH forum trying to fool anyone into thinking LH is always grand and upstanding to all of its customers. They most certainly are not.
Apr 19, 2021, 5:38 am
#10
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LH withdraws its move:
+++ 16.04.2021: Lufthansa to continue feeder flight agreement with Condor until March 2022 +++
Lufthansa will continue an agreement until March 2022 that allows passengers of Condor to use Lufthansa feeder flights as part of their journey to holiday destinations. Lufthansa had terminated the so-called special prorate agreement with Condor at the end of 2020, effective June 1, 2021. Condor then filed complaints and lawsuits at the German Federal Cartel Office and the EU Court in Luxembourg, claiming that Lufthansa was abusing its leading market position. After a preliminary examination, the Cartel Office shared Condor’s position. The EU Commission had also put pressure on Lufthansa not to make business more difficult for its smaller competitor.
Lufthansa will continue an agreement until March 2022 that allows passengers of Condor to use Lufthansa feeder flights as part of their journey to holiday destinations. Lufthansa had terminated the so-called special prorate agreement with Condor at the end of 2020, effective June 1, 2021. Condor then filed complaints and lawsuits at the German Federal Cartel Office and the EU Court in Luxembourg, claiming that Lufthansa was abusing its leading market position. After a preliminary examination, the Cartel Office shared Condor’s position. The EU Commission had also put pressure on Lufthansa not to make business more difficult for its smaller competitor.
May 12, 2021, 2:22 am
#11
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The feeder deal continues till May 2022:
Agreement between Lufthansa and Condor gives participants planning security for the coming months
Lufthansa and Condor have agreed that flights operated by Lufthansa, SWISS and Austrian Airlines can be booked and used as a way of getting to and from Condor long-haul flights with flight dates up to May 10, 2022. This binding agreement between Lufthansa and Condor in the spirit of a constructive partnership is valid for the expected duration of the main proceedings at the Federal Cartel Office. It thus creates security for customers and partners.
The main proceedings at the Federal Cartel Office can thus be conducted with the necessary thoroughness. In these proceedings, a decision will be made on the facts of the case between Lufthansa and Condor.
Lufthansa had terminated the special agreement with Condor on the use of Lufthansa flights as feeders for Condor long-haul flights. Condor has filed a complaint with the Federal Cartel Office against the termination of this agreement.
Lufthansa and Condor have agreed that flights operated by Lufthansa, SWISS and Austrian Airlines can be booked and used as a way of getting to and from Condor long-haul flights with flight dates up to May 10, 2022. This binding agreement between Lufthansa and Condor in the spirit of a constructive partnership is valid for the expected duration of the main proceedings at the Federal Cartel Office. It thus creates security for customers and partners.
The main proceedings at the Federal Cartel Office can thus be conducted with the necessary thoroughness. In these proceedings, a decision will be made on the facts of the case between Lufthansa and Condor.
Lufthansa had terminated the special agreement with Condor on the use of Lufthansa flights as feeders for Condor long-haul flights. Condor has filed a complaint with the Federal Cartel Office against the termination of this agreement.
May 13, 2021, 3:33 pm
#12
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What's the betting that Condor goes the way of dust after May 2022, if not before. It seems to be pretty shaky, so this could be a calculated gamble by LH just to keep things going without lawsuits flying around. Probably the cheaper option.
Jun 9, 2021, 8:55 am
#13
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RYR was succesful in stopping the German aid to Condor:
https://www.irishtimes.com/business/...enge-1.4588481
https://www.irishtimes.com/business/...enge-1.4588481
The commission declared that Germany’s aid to the airline was compatible with EU law as it was meant to compensate Condor for damage caused by natural disasters and exceptional circumstances.
In its ruling, the general court states that the commission should have examined carefully whether or not the damage suffered by Condor was “decisively” the result of the airline having to cancel flights once the pandemic struck.
Accordingly the court annulled the decision. However, it said that as its ruling stemmed from the fact that the statement of reasons given by the commission for allowing the aid was inaccurate, it would suspend the annulment pending a new decision
In its ruling, the general court states that the commission should have examined carefully whether or not the damage suffered by Condor was “decisively” the result of the airline having to cancel flights once the pandemic struck.
Accordingly the court annulled the decision. However, it said that as its ruling stemmed from the fact that the statement of reasons given by the commission for allowing the aid was inaccurate, it would suspend the annulment pending a new decision
