TUI Approves Etihad Joint Venture Airline

European tour company TUI is to go ahead with its plans to create a new European airline with Abu Dhabi’s Etihad.

The TUI board approved the plan to merge its TUIfly airline with leisure operations of Etihad part-owned carrier Air Berlin.

Etihad will acquire Air Berlin’s Niki unit and contribute it to the joint venture with TUI. Etihad currently owns just under 30 percent of Air Berlin.

The new airline will be based in Vienna and have a fleet of 60 aircraft. It will fly from airports in Germany, Austria and Switzerland. Etihad will have a 25 percent stake, TUI 24.8 percent, with the remainder owned by a private Austrian foundation.

TUI said negotiations on the joint venture should be completed in the next few weeks. The venture is subject to regulatory approval.