By Peter Maushagen and Maria Sheahan
BERLIN (Reuters) - German airline Condor, owned by tour operator Thomas Cook (L:TCG), plans to meet competition from Lufthansa's (DE:LHAG) proposed low-cost long-haul operation head-on, its chief executive said.
Lufthansa said this week that it would start long-haul budget flights to tourist destinations in the likes of Cuba and Thailand under the Eurowings banner from the autumn, but Condor CEO Ralf Teckentrup is confident that his company's tourism expertise will ensure it continues to compete.
"If someone attacks you in your core business, you can run away or push back," Teckentrup told Reuters at this week's ITB travel trade fair.
Lufthansa, Germany's biggest airline, has lost market share in European short-haul travel to budget carriers such as Ryanair (I:RYA) and easyJet (L:EZJ) and wants to attract more leisure travellers on long-haul routes, putting it in direct competition with its former subsidiary Condor.
Condor's margin on earnings before interest and tax (EBIT) was 3.7 percent in 2013 and 3.8 percent last year. Lufthansa, which is due to publish 2014 results on Thursday, reported an operating margin of 2.2 percent in 2013.
FLEET EXPANSION
"We won't be scared off by other airlines," Teckentrup said, but he warned that Lufthansa's move would increase capacity on some routes, potentially weighing on prices.
Condor's fleet of 40 aircraft, 25 of which are for long-haul traffic, is dwarfed by the Lufthansa group's 622 planes but is bigger than the planned Eurowings long-haul fleet of up to seven aircraft.
Teckentrup said he would continue to expand Condor's fleet at a rate of one long-haul and one short-to-medium-haul aircraft a year as long as growth remains steady.
"As long as things go well, we will continue to invest and grow," he said.
Teckentrup also brushed off a recent report that parent Thomas Cook was seeking to sell its airline business as part of a cost-saving plan.
"I don't know what arguments there would be against it," he said when asked whether Condor would remain part of the Thomas Cook group.