German leisure carrier TUI fly decided Nov. 21 it will introduce long-haul routes, a move that could significantly change the country’s leisure airline market.

TUI fly plans to initially operate two Boeing 787-8s and to start flying to destinations in the Caribbean and Mexico at the start of the next winter timetable. It is understood TUI fly’s eventual fleet of 787s will grow to five aircraft the following year. While TUI fly did not reveal more details, the aircraft are to be based in Dusseldorf, industry sources said.

The decision came after months of negotiations with pilot union Vereinigung Cockpit (VC) on a new collective bargaining agreement. Company sources say the breakthrough, reached earlier in 2019, is based on stagnant pay and higher productivity. The productivity gains are also going to benefit the airline’s European operation, an insider said.

TUI fly operates a fleet of 28 737NGs, according to Aviation Week Fleet Data Services. It also has four grounded 737 MAX 8s in storage and another 11 MAXs are on order.

TUI fly’s move into widebody operations comes as Condor is seeking a new owner following the bankruptcy of its parent Thomas Cook Group. Condor has been operating under a special creditor protection scheme for the past six weeks and is expected to enter self-administered bankruptcy proceedings in December. The airline continues to operate a normal schedule on the basis of a €380 million ($421 million) government-backed bridge loan that is to be paid back by the end of March 2020.

So far, Condor has benefitted from substantial TUI Group business on its long-haul routes as the tour operator did not have its own widebody fleet in Germany. With TUI now entering the market, Condor is not only losing business but also has to face a new competitor, a factor that any new investor will have to take into account.

Unlike TUI fly, Condor is also operating an aging Boeing 767-300ER long-haul fleet. TUI Group already operates 25 787s in the UK and Scandinavia.

The future of Lufthansa’s lower-cost affiliate Eurowings in the long-haul market is an unknown for both TUI fly and Condor. The airline has handed commercial responsibility for its long-haul flights to its parent; the intercontinental division will be rebranded, with the future model to be based on Swiss sister company Edelweiss Air.

Jens Flottau,