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New airline will have a fleet of around 60 aircraft, offering 15 million seats capacity per year

Etihad Aviation Group (EAG) has approved plans to create a new European leisure airline group in a joint venture with TUI AG.

The new airline will have a fleet of around 60 aircraft, offering 15 million seats capacity per year, focused on point-to-point flying to connect key European tourist markets, Etihad said in a statement.

The transaction is subject to approvals by aviation regulatory bodies and anti-trust authorities.

The new leisure airline group, headquartered in Vienna, will be supported by EAG and TUI Group, will have a strong focus on hotels and cruises.

The group 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 (Hanover, Berlin, Düsseldorf, Cologne, Frankfurt, Stuttgart, Munich, Nuremberg, Baden-Baden, Hamburg, Basel and Vienna).

Key markets will include the Balearics, Canaries, mainland Spain and Greece.

Etihad said the new company be able to leverage synergies and economies of scale accessible through Etihad Airways Partners and the TUI Group to ensure a lean overhead structure and competitive production cost.

TUI AG will hold 24.8 percent of shares in the joint venture company, with Etihad holding a 25 percent stake. The remaining 50.2 percent will continue to be held by the existing private foundation NIKI Privatstiftung.

Etihad said the planned transaction includes an agreement for EAG’s subsidiary Etihad Investment Holding Company LLC (Etihad) to acquire the 49.8 percent share indirectly held by airberlin in its subsidiary airline NIKI Luftfahrt GmbH.

At closing of the transaction, Etihad said it 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 November 23 by TUI AG’s Supervisory Board.

Photo:Ton Jochems - AMS