airberlin and TUI merger talks confirmed by Etihad

The parent company of Etihad Airways, Etihad Aviation Group, has confirmed that talks have taken place with a view to merging part of Air Berlin PLC & Co. Luftverkehrs KG, branded as airberlin, with Germany’s TUIfly, a subsidiary of TUI AG, with the intention of creating a new European leisure airline group.
The proposal will see airberlin’s tourism business, which comprises 35 aircraft – 14 of which are wet-leased from TUIfly, merged with TUIfly to form a new airline group. Currently Etihad holds a 29.21% stake in airberlin, Germany’s second-largest airline after Lufthansa.
The newly created airline will fly to “a broad network” of destinations from Germany, Switzerland and Austria. According to airberlin, “The prospective transaction will be subject to successful negotiations and to all necessary corporate and regulatory approvals.”
This announcement comes a week after airberlin had revealed it was going to undergo major restructuring, which would involve the loss of 1200 jobs and the leasing of 40 jets to its competitor, Lufthansa.
Airberlin has faced stiff competition over the last three years from both Lufthansa and low-cost carrier Ryanair and, as a consequence, has lost over €1 billion (US$1.11 billion). However, in a joint statement from Etihad and airberlin, the new airline would be supported by Etihad’s expertise while making use of TUI’s distribution capacity.