Germany Cartel Office Probes Lufthansa on Condor Complaint
(Bloomberg) -- Germany’s cartel office opened an antitrust probe into Deutsche Lufthansa AG after leisure airline Condor complained about the termination of a commercial agreement between the carriers.
The inquiry will focus on Lufthansa’s decision to end a deal allowing Condor to market short flights from the larger carrier that feed into Condor’s long-distance journeys, Kay Weidner, spokesman for the federal cartel office said.
That agreement is due to be terminated on June 21, in the middle of the typically busy summer travel season. Condor filed a complaint this month saying that the move is an abuse of Lufthansa’s dominant market position in the region.
Andreas Mundt, president of Germany’s cartel office, said in a statement that the body was trying to establish the facts of the case. He added that the probe was necessary to ensure competition in Germany’s “already highly-concentrated” flight market.
The spat comes as Lufthansa pivots to long-haul tourism travel, a niche occupied for years by Condor, its one-time subsidiary. Lufthansa is launching a Eurowings Discover brand with which it hopes to grow in lower-cost leisure travel, a segment of the market that’s expected to recover from the coronavirus downturn faster than business travel.
Lufthansa defended its decision to cancel the deal as it fights to overcome the crisis in global aviation.
“It would be irresponsible to neglect the utilization of our own aircraft and thereby jeopardize additional jobs at Lufthansa,” it said in an email.
Condor said it welcomes the probe. Lufthansa is trying to extend its “quasi monopolistic” position on domestic and European flights into long-haul tourist routes, it said.
Looking into potential anti-competitive behavior is especially prudent since both companies received government aid, Condor said.
“Taxpayers’ money should be used to help companies survive against the backdrop of the pandemic, but not to push other companies out of the market,” Condor Chief Executive Officer Ralf Teckentrup said in a statement.
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