Loss-making Air Berlin, Germany’s second biggest airline, has decided to join discussions that its main shareholder Etihad Airways has entered into with TUI, the German tour operator. The discussions concern the creation of a European leisure airline group, focused on point-to-point flying to connect key tourist markets.  

Air Berlin would contribute its tourist-oriented operations to a new venture to be established by TUI and Etihad. This new European leisure airline group would combine the German TUIfly company (including the aircraft currently operated by TUIfly for Air Berlin under a separate wet lease agreement), and the current leisure-travel fleet of the airberlin group, with the expertise and backing of Etihad Airways.

This latest move follows Air Berlin’s announcement last week of a far-reaching restructuring plan following years of losses, including a record €447m last year. Air Berlin said it would focus on its core airline business as a network carrier with a fleet of 75 aircraft operating from hubs at Berlin and Dusseldorf while evaluating strategic options for its tourist-oriented business. The reduced fleet comprises 17 A330s, 40 A320s and 18 Q400s.

As part of that plan, 40 aircraft from the current fleet of 140 aircraft are to be provided to Lufthansa (35 for Eurowings, five for Austrian Airlines), including up to 38 under a proposed six-year wet lease agreement. The plan also includes 1,200 redundancies.

Going forward, Air Berlin says its profitable long-haul programme will be expanded with new routes and additional frequencies, particularly to the United States. The airline’s short- and medium-haul programme will concentrate on year-round business markets with a strong focus on Italy, Scandinavia and Eastern Europe. It will also aim to build a higher share of domestic business travel.