Etihad in talks with Germany’s TUI to create new European airline

Abu Dhabi’s Etihad Aviation Group confirmed that it is in talks with German travel and tourism company TUI to create a new European leisure airline group.

The new company will focus on point-to-point flying to connect key tourist markets such as Germany, Austria and Switzerland, a statement said.

Under the proposal, the touristic operations of the Air Berlin group – in which Etihad has a 29.21 per cent stake – and the German TUIfly company will form the new airline group established by TUI and Etihad Aviation Group.

The new firm will operate the aircraft currently operated by TUIfly for Air Berlin under a wet-lease agreement.

The leisure airline group will be supported by Etihad Aviation Group and utilise TUI’s distribution capacity, the statement said.

TUI, Etihad and Air Berlin intend to finalise an in-principle agreement in “due course”.

Any agreement entered into will be subject to all necessary corporate and regulatory approvals.

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.

Etihad Aviation Group holds minority stakes in Air Berlin, Air Serbia, Air Seychelles, Alitalia, Etihad Regional, Jet Airways and Virgin Australia.

Air Berlin is the second largest airline in Germany and carried more than 30.2 million passengers in 2015.