Etihad Aviation Group and TUI Group have abandoned their plan for a leisure joint venture based on Air Berlin's Austrian affiliate Niki and German-based TUIfly.

Talks on the proposal will not continue as "Niki is no longer available for a joint venture", says TUI.

Etihad, meanwhile, says the decision followed "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".

The intention had been to establish a new leisure carrier with around 60 aircraft – from Niki and TUIfly – within the context of Air Berlin's latest restructuring efforts.

As it is halving its fleet to 75 aircraft and cutting its network to concentrate on scheduled flights, Air Berlin has transferred all routes from Germany to southern Europe (except Italy), Turkey and North Africa over to Niki for the summer 2017 schedule.

Some 35 Air Berlin aircraft were transferred to Niki. But the formation of the proposed new carrier and the addition of TUIfly's operation were delayed.

"The leisure operations of Air Berlin Group will now continue to operate as a separate business unit, under the Niki brand," says Etihad. "Further details of this structure will be announced in due course by Air Berlin."

In the view of TUI executive board member Sebastian Ebel – who oversees the group's business in Austria, Germany, Poland and Switzerland – "a strong European leisure airline continues to make great strategic sense" as "the aviation sector is characterised by overcapacity in Germany".

He adds: "We will push the repositioning of TUI fly further ahead in order to develop long-term prospects for the airline and its employees."

TUI says it wants to "contribute to the stabilisation of the German aviation market" and is open to other joint-venture options.

Source: Cirium Dashboard