Etihad ends talks with Tui over creation of leisure airline

Etihad Airways has abruptly ended talks with Tui, the world’s largest tour operator, over the creation of a new European leisure airline as the proposed joint venture fell victim to strategic changes at the Gulf carrier. The complex deal would have seen Tuifly, the German budget flights group, merge with part of its Etihad Airways-backed rival Air Berlin, to create a new airline capable of carrying 15m passengers a year on a fleet of about 60 aircraft. On Thursday, Tui said that the Air Berlin-controlled Austrian carrier Niki “is no longer available for a joint venture”, leaving the parties to abandon negotiations that have been ongoing since October last year. One person briefed on the breakdown of talks said Tui’s management was informed of the decision on Wednesday. Tui executives were told that Etihad was no longer willing to split off Niki from Air Berlin, as the UAE-based group sought new solutions to rescue the struggling German airline, the person said. The Gulf airline said: “Etihad has taken this decision following many months of negotiations, in good faith, during which time the parties have been unable to reach agreement on the final nature of such a joint venture.” <br/>