State handout means Thomas Cook’s German subsidiary keeps flying until March
While authorities soldier on with bringing home more than 100,000 stranded Thomas Cook customers this morning after it went bust on Monday, the firm’s German subsidiary, Condor, has been saved by state financing.
The German government has given Condor six months’ financing, worth €380m (£350m), to continue trading and find a rescue deal.
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Economy minister Peter Altmaier said: “Condor is a profitable company and therefore our decision was based on economic factors, not on political criteria,”
He added the decision meant that many of the roughly 5,000 workers would be able to keep their jobs.
But the British Airline Pilots’ Association (Balpa) said it raised questions as to why the British government did not make a similar decision for the parent company, after its collapse led to job losses for its 9,000 workers.
Thomas Cook asked the government for £150m to keep it afloat before eventually going bust on Sunday, but Prime Minister Boris Johnson said the plea had been turned down.
Balpa general secretary Brian Strutton said: “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.”
On Monday, Prime Minister Boris Johnson said that paying the sum would have created “a moral hazard in the case of future such commercial difficulties that companies face”.
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“I do think that we need to look at ways in which tour operators, one way or another, can protect themselves from such bankruptcies in future.
“Clearly the systems that we have in place to ensure that companies like Thomas Cook don’t in the end come to the taxpayer for help.”