Etihad, TUI Group in final talks to create new leisure airline

Abu Dhabi-based Etihad Aviation and German holiday company TUI Group are in final discussions to create a European leisure airline group, which is expected to operate 60 aircraft on point-to-point services to key tourist markets. The deal is expected to be finalized at a Nov. 23 board meeting. “The new, yet-to-be named airline will have a market share in the Germany/Austria/Switzerland leisure business of 35%,” a source involved in the negotiations said. “The transaction will be completed within the next weeks. The airline will be a completely new company on the market.” The source said the current project name of the company is Blue Sky. TUIfly employees have also agreed to the latest development and are now confident the new airline will offer future growth potential. On Oct. 6, TUIfly had to cancel flights and decided to completely shut down flight operations after many aircraft crew called in sick on short notice. The action followed concerns about the merger between the two companies. The source said the new holding company is expected to be based in Austria, with Etihad 25% and TUI taking a 24% stake. The remaining 51% is expected to be held by an Austrian foundation, to ensure Austrian majority ownership and maintain international traffic rights. The airline is planning a fleet of 14 Boeing 737s (currently operated by TUIfly for airberlin under a wet-lease agreement), 27 TUIfly 737NGs, as well as 17 Airbus A320 family aircraft from Austrian airberlin subsidiary FlyNiki, total 58 aircraft. But the airline plans to operate 60 aircraft initially.<br/>