Talks Between Etihad and TUI Group Collapse Over Creation of Leisure Carrier

The Gulf-based operator had planned to buy up Niki, a subsidiary of Air Berlin, and merge it with TUIFly to create a new airline.

Etihad Airways, which was in talks with TUI Group to create a new joint venture leisure carrier, has announced that it has withdrawn from formal negotiations with the company, Reuters reports. The announcement was revealed today and puts an abrupt end to a plan announced by the Gulf-based carrier last year, which would have seen it purchase Niki, a subsidiary carrier of Air Berlin, and merge it with TUIFly, TUI’s airline.

Etihad owns nearly a 30 percent share in Air Berlin and has recently appointed a new chief executive. This change in leadership, say industry analysts, may allow the airline the opportunity to review its expansion plans.

Commenting on the cessation of talks, Etihad said that a deal on the venture had not been reached in spite of “many months of negotiations.” TUI offered only that Niki was “no longer available” for any further bargaining.

Neither TUI or Etihad have given any further comment on the situation, but in a statement, TUI executive board member Sebastian Ebel said, “We will push the repositioning of TUIFly further ahead in order to develop long-term prospects for the airline and its employees.” He also added that TUIFly would remain receptive to other offers of partnership and joint ventures.

For its part, Etihad clarified that the leisure arm of Air Berlin would operate as a distinct entity under the Niki brand. “Further details of this structure will be announced in due course by Air Berlin,” Etihad explained.

Speaking of the collapsed negotiations, an unnamed source told the news agency, “The deal didn’t work out because it didn’t make sense for Niki, it didn’t add up.”

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