Abu Dhabi-based Etihad Aviation Group’s (EAG) board has approved plans for its proposed joint venture with TUI to create a new European leisure airline group.
With a fleet of around 60 aircraft, the new airline group plans to offer capacity of 15 million seats per year.
Headquartered in Vienna, the airline group is scheduled to begin operations in April 2017, a statement said.
EAG’s board approval comes after the JV was approved by Germany-based TUI’s supervisory board on November 23.
The planned transaction includes an agreement for Etihad to acquire the 49.8 per cent share indirectly held by airberlin in its subsidiary airline NIKI Luftfahrt.
At the closing of the transaction, Etihad will immediately contribute the share in NIKI to the new airline group and will not effectively control, or become a majority owner of NIKI.
TUI will contribute its subsidiary TUIfly to the joint venture, including the 14 aircraft currently operated by TUIfly for airberlin under a wet-lease agreement.
Etihad will hold a 25 per cent stake in the joint venture company with TUI holding 24.8 per cent of shares. The remaining 50.2 per cent will continue to be held by the existing private foundation NIKI Privatstiftung.
The transaction is subject to approvals by aviation regulatory bodies and anti-trust authorities.
The new airline group will be focused on point-to-point flying to connect European tourist markets. It will serve destinations from Germany, Austria and Switzerland (Hanover, Berlin, Düsseldorf, Cologne, Frankfurt, Stuttgart, Munich, Nuremberg, Baden-Baden, Hamburg, Basel and Vienna). Key markets will include the Balearics, Canaries, mainland Spain and Greece.
Further details regarding the JV will be revealed by EAG and TUI after the successful completion of the negotiations, the statement added.
TUI Group has a portfolio of more than 300 hotels, 14 cruise liners, six European airlines with around 140 aircraft and a distribution network covering more than 1,800 travel agencies and online portals.
EAG holds minority stakes in Air Berlin, Air Serbia, Air Seychelles, Alitalia, Etihad Regional, Jet Airways and Virgin Australia.