Etihad buys 70% stake in Air Berlin's loyalty scheme

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Etihad Airways has purchased a 70% stake in Air Berlin's frequent flyer programme, 'Topbonus', in a transaction valued at €200 million ($264 million) by the Gulf carrier.

Air Berlin says it has generated revenue of €184.4 million from the divestment, after accounting for its remaining 30% share in the equity of Topbonus.

The loyalty scheme will be transformed into a separate legal entity headquartered in Berlin, called Topbonus Ltd. Air Berlin retains the right to buy back another 10%, lifting its share to 40%.

Etihad's own loyalty scheme, Etihad Guest, will "cooperate with the new company", the Gulf carrier says in a statement.

Etihad Guest had already announced plans to become a multi-airline scheme in June 2013, when it will incorporate Seychelles Plus, the Air Seychelles loyalty scheme. Etihad owns a 40% stake in the Seychellois carrier.

The German Federal Cartel Office, Bundeskartellamt, has given its approval to the Topbonus transaction, which is due to be closed by the end of the year.

"This new investment creates an excellent growth opportunity for us to capitalise on the loyalty management market, while offering a greater range of benefits to passengers from multiple partner airlines," says Etihad chief executive James Hogan.

"The acquisition of a stake in the new Topbonus company is part of our strategic evolution to create a ‘house of brands’ loyalty management company, with global scale."

Etihad boosted its stake in Air Berlin to 29.21% in December 2011, making it the largest single shareholder. The two carriers say their partnership has to date generated more than €100 million in additional revenues.

The sale of Topbonus comes alongside Air Berlin's two parallel cost-cutting initiatives, 'Shape and Size' and 'Turbine 2013'.