The board of Etihad Aviation Group (EAG) has approved plans to create a new European leisure airline group in a joint venture with TUI AG. The new group will operate a fleet of around 60 aircraft offering a capacity of 15 million seats per year and will focus on point-to-point flying to connect key European tourist markets. The transaction is subject to approvals by aviation regulatory bodies and anti-trust authorities.
The planned transaction includes an agreement for EAG’s subsidiary Etihad Investment Holding Company LLC (Etihad) to acquire the 49.8% share indirectly held by airberlin in its subsidiary airline NIKI Luftfahrt GmbH. At closing of the transaction, Etihad will immediately contribute the share in NIKI to the new European leisure airline group and will not effectively control, or become a majority owner of NIKI. TUI will contribute its subsidiary TUIfly GmbH to the joint venture, including the 14 aircraft currently operated by TUIfly for airberlin under a wet-lease agreement.
This follows approval on 23rd November by TUI AG’s Supervisory Board. TUI AG will hold 24.8% of shares in the joint venture company, with Etihad holding a 25% stake. The remaining 50.2% will continue to be held by the existing private foundation NIKI Privatstiftung.
The new leisure airline group, headquartered in Vienna, is scheduled to begin operations in April 2017, the start of the summer season, serving a broad network of destinations from Germany, Austria and Switzerland. Key markets will include the Balearics, Canaries, mainland Spain and Greece.
The joint venture will seek to exploit synergies and economies of scale accessible through Etihad Airways Partners and the TUI Group to ensure a lean overhead structure and competitive production cost.