TUI mulls resurrecting Air Berlin leisure carrier

FRANKFURT • TUI AG is considering resurrecting efforts to form a joint venture (JV) with Air Berlin plc and Etihad Aviation Group by taking a bigger role in the endeavour than originally planned, according to people familiar with the situation.

TUI is studying whether to take a majority stake or even full ownership of the proposed leisure airline — which was intended to combine assets from Air Berlin’s Niki and TUI’s TUIfly — said the people, who asked not to be identified as the talks are private.

However, TUI’s reluctance to add German capacity stands in the way of a deal, said one of the people.

The original project, which collapsed a month ago when Etihad pulled out, was aimed at letting German tour operator TUI revive its unprofitable TUIfly airline while allowing loss-burdened Air Berlin to offload its Niki leisure brand.

TUI and Etihad, Air Berlin’s biggest investor, would have each held about one-quarter of the venture, with just over 50% owned by the Niki Privatstiftung foundation in Austria. Combining TUIfly and Niki would have created a 60-plane fleet serving mainly Mediterranean and North African vacation destinations from Germany.

TUI is focusing on further improving efficiency at the airlines across its group, after reducing aircraft procurement costs and maintenance and ground operating expenses, TUI spokesman Kuzey Esener said, declining to comment further. The company said last month that it remains open to a partnership or JV that may help improve the competitive position of its German arm. — Bloomberg