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Thomas Cook collapse: Germany’s Condor to keep flying with state loan

German charter airline Condor, a subsidiary of bankrupt British tour operator Thomas Cook, said Tuesday it had been granted a €380 million state bridging loan.

Thomas Cook collapse: Germany's Condor to keep flying with state loan
A Condor Airbus A330 in Frankfurt in November 2018. Photo: DPA

The holiday airline founded in 1956 operates 58 aircraft, has 4,900 staff and flies about eight million passengers a year from eight German cities to over 100 destinations in Europe, Africa and North America.

The carrier reported a day earlier that it had applied for a state-guaranteed bridging loan with the German federal government and the Hesse state government.

READ ALSO: Germany's Condor seeks government aid to keep flying

It then confirmed late Tuesday it had “received a guarantee from the federal government and the state government of Hesse for a six-month bridging loan of 380 million”.

The money could be disbursed after agreement from the European Commission,
it said, adding that “it is not yet possible to say when the decision from Brussels will be known”.

Condor said the bridging loan was meant “to prevent possible liquidity bottlenecks at Condor resulting from the insolvency of the English Condor parent company Thomas Cook Group”.

“Condor is an operationally healthy and profitable company, which will also record a positive result in the current year,” chairman Ralf Teckentrup said in a statement.

“This commitment is an important step towards securing our future.”

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TRAVEL

Customers facing long waits for refunds over cancelled flights in Germany

Flights were brought to a near standstill during the height of the coronavirus crisis. But many people in Germany are still waiting for refunds or vouchers for airlines. What's happening?

Customers facing long waits for refunds over cancelled flights in Germany
A woman in a near empty Düsseldorf airport in March during the height of the pandemic in Germany. Photo: DPA

From flights being grounded to borders closing and countries refusing entry to people, there's been huge disruption to travellers due to the coronavirus pandemic.

But many passengers are still waiting to be given their money back for flights cancelled months ago, including many readers of The Local.

Consumer protectors and aviation law experts agree that many airlines are deliberately delaying payments.

That's the case even after the state rescue of the largest provider in Germany Lufthansa and a new German law which makes it possible for companies to offer a voucher first.

According to the German Travel Association (Deutsche Reiseverband), tickets due for refund in the Bundesrepublik alone are worth a total of around €4 billion.

READ ALSO: Coronavirus – what are your rights for cancelled events and flights in Germany?

Are airlines paying out for cancelled flights?

As a result of the coronavirus pandemic, air traffic came to an almost complete standstill in mid-March and thousands of flights were cancelled.

According to EU law, airlines must refund the ticket price of a cancelled flight within seven days. Lufthansa and other airlines had, however, initially relied on offering customers vouchers. This was called out by the EU Commission which says that people are entitled to refunds if they want them.

At the beginning of July, a law was passed in the Bundestag which means vouchers can be offered to consumers first. However, customers do not have to accept them, and can still have the money refunded if they do not use the voucher.

Consumer protectors and politicians say the behaviour by airlines and providers is not good enough.

Marion Jungbluth, mobility expert at the Federation of German Consumer Organisations (Verbraucherzentrale Bundesverband or vzbv), said money “must be paid out” now.

The Greens are also demanding tougher action – and fines – by the Federal Aviation Authority (Luftfahrt Bundesamt) against airlines which do not stick to the rules.

Although the authority is prepared to do so in principle, it says it is waiting for complaints and cases to be filed. Green politician Markus Tressel, however, believes the federal government has a duty to find a quick solution so that thousands of customers do not have to take legal action individually.

READ ALSO: 'I'm cautiously optimistic about a visit at Christmas': How the pandemic hit readers' trips to Germany

Air traffic law portals have not waited that long. Lars Watermann of EUflight.de said: “We have already filed more than 1,000 complaints, either as a collection service provider for the customer, or on our own account.”

'Breach of law in transport industry'

The Federation of German Consumer Organisations confirmed that there are daily struggles online and on phone hotlines between customers and providers because airlines gave the wrong impression that travellers could only demand vouchers – not refunds.

References to the possibility of a reimbursement are often hidden in small print on websites and can also be formulated in a complicated way, while there are occasional unjustified cancellation fees demanded.

“We are currently observing a systematic breach of law right across the air transport industry,” said lawyer Peter Lassek from the Consumer Advice Centre in Hesse.

“A voucher can be obtained within minutes, whereas refunds are supposed to take months. That can't be the case,” said Watermann, who has not seen any improvement even after the state rescue of the Lufthansa Group.

“Unfortunately, Lufthansa has not changed its behaviour even after the rescue. Every possible trick is being used to prevent the payouts.”

READ ALSO: When are airline passengers in Germany entitled to flight compensation?

Payments are 'too slow'

As well as passengers, many travel agencies are also pinched because they often have to wait in vain for the airlines' money, but have to cater to their own customers, said the German Travel Association. It means small firms like travel agents are struggling to survive the crisis.

Lufthansa has admitted that due to the coronavirus shutdown, bosses switched off the automatic reimbursement via the booking systems and justified this by saying they needed to examine each case individually.

Since then, however, staff capacities have been constantly increased in order to be able to process all refund applications.

The group has announced that it will get rid of the bottleneck on refund requests by mid-August. At the end of June, however, around one billion euros in refunds were still outstanding – about half of the total.

Competitor Ryanair wants to get 90 percent of the cases off the table by the end of July. But that's too slow, Watermann said, and named his favourite airline: “Easyjet are the only ones who've been doing it well”.

The Hessian Consumer Advice Centre advised affected consumers to request a refund in writing with a two-week deadline.”If the airline does not react, you have the option of taking legal action to demand payment or file a suit.

The Local is looking into your rights regarding air travel and disrupted trips due to the coronavirus pandemic. Got a question? Email us: [email protected]

Vocabulary

Consumer Advice Centre (die) Verbraucherzentrale

Flight refunds – (die) Flugticket-Erstattungen

Voucher – (der) Gutschein

Flight cancellation – (der) Flugausfall

We're aiming to help our readers improve their German by translating vocabulary from some of our news stories. Did you find this article useful? Let us know.

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