The German aviation landscape has long been defined by the intertwined histories of its two largest airlines: Lufthansa and Condor. This relationship, which has evolved significantly over decades, has recently reached a pivotal moment with profound implications for competition and connectivity within the country. Let’s unpack this dynamic partnership and its uncertain future.
A Brief History of Lufthansa and Condor
Condor was founded in 1955 with Lufthansa as a shareholder and initially operated as its leisure airline partner. Over time, Lufthansa divested its shares, and by the early 2000s, Condor became independent. When Thomas Cook, its then-owner, went bankrupt, Condor transitioned into a standalone airline, undergoing significant transformation and growth.
In recent years, Condor has modernized its fleet with Airbus A330-900neos and expanded transatlantic routes, directly competing with Lufthansa on flights between Frankfurt (FRA) and key North American destinations like Los Angeles (LAX), Miami (MIA), and New York (JFK). However, Condor has long relied on Lufthansa’s short-haul network to feed passengers into its long-haul flights.
The Feeder Traffic Dilemma
Frankfurt’s prominence as an aviation hub is largely due to Lufthansa’s vast network. Historically, Lufthansa provided feeder traffic to Condor under a Special Prorate Agreement (SPA), allowing Condor to offer competitive fares by connecting passengers from Lufthansa’s European flights.
This arrangement, however, was imposed by German competition laws, and Lufthansa has long sought to end it. In December 2024, Germany’s Federal Court of Justice ruled in Lufthansa’s favour, allowing the airline to terminate this agreement, and forcing Condor to rethink its strategy.
Lufthansa Wins Court Battle
After years of legal battles, Lufthansa secured a significant victory in December 2024. Germany’s Federal Court of Justice ruled in favour of Lufthansa, allowing the airline to terminate its special feeder agreement with Condor. While negotiations between the two airlines continue, the ruling meant that Condor was no longer entitled to preferential pricing on Lufthansa’s flights.
For Lufthansa, this marked the end of an arrangement it deemed counterproductive to its competitive position. For Condor, it signalled a challenging new chapter, as the airline had to adapt to a future without guaranteed feeder traffic from its largest competitor.
Regulatory Scrutiny on Lufthansa’s Transatlantic Joint Venture
Despite Lufthansa’s legal victory, the European Commission intervened shortly after. In January 2025, the Commission ordered Lufthansa to reinstate the feeder flight agreement as part of an ongoing investigation into the A++ transatlantic joint venture between Lufthansa, United Airlines, and Air Canada. The Commission expressed concerns that the termination of Condor’s feeder access could unfairly restrict competition, particularly on the lucrative Frankfurt-New York route.
The European Commission’s decision stems from broader concerns about the impact of Lufthansa’s transatlantic JV. The regulator had previously imposed conditions on the alliance in 2013 to ensure fair competition, including access to feeder traffic for competitors like Condor. With these commitments expiring in 2023, regulators have reopened their scrutiny, fearing that the JV has resulted in market dominance.
In response to the European Commission’s decision, a Lufthansa spokesperson stated, “We do not share the EU Commission’s position and are currently reviewing the Commission’s new announcement.” Condor, on the other hand, welcomed the decision but has not yet commented on its long-term strategy.
Implications for Condor
Condor’s reliance on Lufthansa feeder traffic has been significant, with a large percentage of its long-haul passengers connecting via Lufthansa flights. To mitigate the impact, Condor has begun building its own European feeder network, with flights from Frankfurt to key cities such as Berlin (BER), Milan (MXP), Prague (PRG), Rome (FCO), and Zurich (ZRH). However, this expansion may not fully compensate for the connectivity lost through Lufthansa’s departure.
The airline’s challenges are evident in its recent decision to cut six transatlantic routes, highlighting the difficulty of sustaining these markets without sufficient connecting traffic. Additionally, Condor’s transatlantic appeal often skews toward U.S. travellers rather than European ones, complicating its ability to build a robust European feeder network.
A Path Forward?
Condor’s leadership faces a critical test as they navigate these changes. The airline’s partnership with Alaska Airlines, which has driven growth in Seattle, demonstrates the value of expanding alliances. Condor could benefit from further partnerships or even aligning with a global airline alliance such as Oneworld. However, resistance from existing European Oneworld members could complicate this prospect.
Despite the challenges, Condor’s recent operational improvements and strategic focus provide a solid foundation for adaptation. The airline’s management team has proven capable of navigating adversity, and its ability to evolve will be crucial in this new competitive landscape.
The Broader Impact on German Aviation
Lufthansa’s dominant position in Germany has long been a subject of debate, with critics arguing that reduced competition harms consumers. The demise of competitors like Airberlin and the limited success of low-cost carriers such as Ryanair underscore the difficulties of challenging Lufthansa’s market power. The European Commission’s intervention suggests a growing willingness to enforce competition laws more aggressively, particularly in transatlantic markets where JVs have created quasi-monopolistic conditions.
Conclusion
The end of the special relationship between Condor and Lufthansa represents a major shift in German aviation. While Lufthansa can now fully pursue its competitive interests, Condor must chart a new course to maintain its position as a leading leisure airline. Whether through expanded partnerships, a stronger regional network, or innovative strategies, Condor’s response to this challenge will shape its future—and potentially, the future of competition in German aviation.