Cook's airline sale scrapped
SOARING oil prices have forced package holiday giant Thomas Cook to scrap the planned £478million sale of its Condor charter airline.
The FTSE 100 group had been in talks about merging Condor and Air Berlin to create a budget airline to rival easyJet and Ryanair.
But yesterday the companies withdrew their application to German competition authorities, citing dearer fuel and worsening economic conditions since the deal was unveiled last September.
Thomas Cook, led by chief executive Manny Fontenla-Novoa, said it still viewed Condor as a “strong business with significant potential”.
It remained in talks with Air Berlin about an alternative deal and was pursuing other options, prompting speculation about a possible tie-up with airline TUIfly.
Thomas Cook would have collected £95million cash and a 30 per cent stake in the enlarged Air Berlin, worth up to £383million.
Pending a decision on the airline’s future, a £296million share buyback has been suspended part-way through. Thomas Cook shares fell 9dp to 174p.
Investment bank Landsbanki said: “We are sceptical that any near-term alternative solution can be found for Condor.”