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Etihad and Tui hold talks about establishing new tourism airline

Abu Dhabi-based Etihad Aviation Group and German holiday giant TUI are in discussions to create a European leisure airline group, which is expected to operate 58 aircraft on point-to-point services to key tourist markets. In a statement released, the partners detailed plans to combine the leisure operations of airberlin group and German carrier TUIfly into a new airline group, serving destinations from Austria, Germany and Switzerland.

Etihad agreed to become Air Berlin’s largest shareholder in 2011 by taking a 29.2 per cent stake, and has provided a series of cash injections that have kept the German airline going through significant financial problems. Air Berlin has been struggling to develop a viable business model and recorded a net loss of €271m for the first half of this year. Meanwhile, Germany’s Tui group, which owns tour operators as well as airlines and hotels, said last year it was rationalising its multiple carrier brands. Etihad and Tui said in a joint statement mentioned that they were in talks to create a “strong European leisure airline group, focused on … flying to connect key tourist markets”.

The companies said they were proposing for the new airline to absorb the charter operations of Air Berlin and TUIfly, Tui’s low-cost airline. The new airline would be jointly owned by Etihad and Tui and would serve a “broad range of destinations” from Germany, Austria and Switzerland, but no details on a timetable for a deal or its financial structure were provided.