Air Berlin said to seek funding via Etihad stake in Niki arm

Air Berlin is seeking a much-needed cash injection from investor Etihad Airways as the Gulf carrier draws up plans to buy a stake in the German company’s Austrian leisure arm Niki, which is being spun off and merged with a peer, people familiar with the plan said. Abu Dhabi-based Etihad will take a holding in Niki as a prelude to combining it with TUI’s German airline unit, according to the people. The valuation will be closely watched, since an inflated price could suggest Etihad is seeking to fund Air Berlin while circumventing rules limiting foreign ownership of EU airlines. While talks on the Niki transaction are underway there’s no assurance that agreement will be reached. An Air Berlin spokesman declined to say whether the company will be reducing its holding in the Austrian business. Etihad and TUI also declined to comment. Etihad has been trying to shore up Air Berlin since a 2011 deal aimed at feeding more passengers into its global network. <br/>