Last flight of Condor?

Last flight of Condor?

So, did Pittsburgh International Airport really lose its once heavily subsidized Condor Airlines flights to Frankfurt, Germany, because of the coronavirus pandemic?

Or was it, at least in part, the convenient cover story of a repeatedly heavily subsidized airline in trouble before the pandemic hit?

As the Post-Gazette reports, Condor has curtailed service to all U.S. cities except Seattle this summer. It cited “travel warnings of the German government as well as the travel restrictions to enter the U.S.”

“That means Condor’s seasonal twice-weekly flight between Pittsburgh and Frankfurt … will be grounded this year – and perhaps beyond,” the P-G said.

That “perhaps beyond” phrase is the operative one, given the financial struggles of Condor even before coronavirus hit. But the airline says it is “keen” to resume that service next summer.

It was in 2017 that Condor was granted a two-year subsidy of $500,000 total to fly out of PIT. To its credit – unlike some other subsidized airlines that pulled out after the public money ran out – Condor decided to continue those flights in 2019 and, reportedly, was poised to do so in 2020.

The Condor flights were considered a success serving Greater Pittsburgh businesses with German connections, averaging 85 percent to 90 percent full. And Condor was a profitable company with, in its 2018-19 financial year, an operating profit of 57 million euros on 1.7 billion euros in revenues.

Which raises the question of why Condor “required” a PIT public subsidy in the first place.

But behind the scenes, things were a mess. As its parent company – U.K. travel group Thomas Cook – failed, Condor, its liquidity severely compromised, required hundreds of millions of dollars in bailout money (primarily in guaranteed German government loans) to restructure.

Yes, the pandemic only exacerbated those struggles. And Condor has received hundreds of millions of public dollars more. Oh, and an investment deal with Polish investors fell through in April.

Condor appears to be on a ventilator. Whether it weans itself off it on its own or through continued government subsidies is an open question.

So, back to the original question:

Did the pandemic quash Condor’s PIT flights or was it Condor’s continuing financial problems that, at least initially, had nothing to do with coronavirus?

While Condor’s financial issues are complex, clearly both contributed. That said, in its zeal to re-secure Condor’s flights for PIT, the Airport Authority, facing its own financial issues and lousy history of subsidizing failures, would be unwise to throw more money at Condor.

After all, the Pittsburgh-to-Frankfurt flights were touted as a financial success. The only further subsidy Condor should receive is the one underwritten by purchased tickets.

Colin McNickle is communications and marketing director at the Allegheny Institute for Public Policy (cmcnickle@alleghenyinstitute.org).