German charter airline company Condor will slash up to 25% of its workforce to reduce costs and recover its business which is severely impacted by the coronavirus pandemic. The announcement was made by the airline’s Chief Executive Officer Ralf Teckentrup while speaking to German newspaper Frankfurter Allgemeine Sonntagszeitung weekly.
“Like other airlines, we will have to cut about 15% to 25% of jobs. That would be between 650 and 1,000 jobs,” Teckentrup told the Sunday newspaper, adding he expected a crisis in the airline sector to last until 2024.
While the move is expected to affect between 650 and 1,000 employees at the company, specific departments where reductions would be made have not been announced.
The airline was already in a soup before the coronavirus pandemic. The impact of COVID-19 has only made things even worse for the low cost airline. The airline’s owner, Thomas Cook, collapsed into administration in September 2019 as a result of financial difficulties that had plagued the company for a long period of time.
The airline since then, has been searching for a new owner after receiving funding to continue operating as a separate entity. A deal was in place for Warsaw, Poland-based operator LOT Polish Airlines to purchase Condor. However, since the pandemic LOT has withdrawn its offer.
However, In April, the German government and the federal state of Hesse agreed to give Condor loans worth 550 million euros.
“We will have lower income and higher costs and have to repay state aid … Average ticket prices will rise,” said Teckentrup.
Along with job cuts, the airline will also be moving to a smaller headquarters and aims to save 1 million euros ($1.13 million) in real estate costs. The move will be able to happen as the airline no longer has to house employees of former owner Thomas Cook.
In addition, approximately 10-15% of the airline’s headquarters staff will continue to work from home even as the pandemic subsides. A timeframe for the move has not been announced, nor has the location of the new headquarters.
Executives have also said that a search for a new owner won’t commence until the end of 2021, at the earliest. However, the airline’s CEO believes another takeover bid by LOT may be possible once the industry recovers.
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