A new European leisure airline group is set to emerge from a joint venture between Etihad Aviation Group (EAG) and Europe's largest tour operator TUI.
The new airline group, headquartered in Vienna, will have a fleet of around 60 aircraft offering 15 million seats capacity per year. It will start operations in April 2017, serving destinations in the Balearics, Canaries, mainland Spain and Greece from Germany, Austria and Switzerland.
The planned transaction, which is subject to regulatory approvals, will be preceded by Air Berlin divesting its 49.8 per cent share in its subsidiary carrier Niki to EAG's subsidiary Etihad Investment Holding Company (Etihad).
At closing of the transaction, Etihad will immediately contribute the Niki share to the new airline group, and will neither control nor 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 Air Berlin under a wet-lease agreement.
TUI will hold 24.8 per cent of shares in the new company and Etihad 25 per cent, while the remaining 50.2 per cent will be controlled by the existing private foundation Niki Privatstiftung.
Meanwhile, Etihad's acquisition of Air Berlin's shares in Niki represents yet another cash injection into the debt-ridden airline, reportedly to the tune of US$321 million. Etihad had in 2012 bought a 29 per cent stake in Air Berlin in hopes of boosting its European network, but this was followed by years of loss-making performance by the German budget carrier.