Etihad and Tui to create low cost carrier

Etihad A330 (Image: Nick Harding/Aviation Wales)Etihad A330 (Image: Nick Harding/Aviation Wales)

The sale by Air Berlin of its stake in Austrian low cost carrier (LCC) Niki to Abu Dhabi based Etihad has paved the way for Etihad and Tui to create a super low cost carrier operation based in Germany.

The 49.8% stake in Niki will be used by Etihad as its contribution to the new european group which it will form with travel group Tui. The deal also sees all of Niki’s A319 & A320 aircraft transferred to Air Berlin and likewise, a batch of Air Berlin A321’s will be transferred to Niki in a deal that’s worth around $320m to Air Berlin.

Etihad and Tui are aiming to create a European low cost airline that will instantly become the 6th biggest LCC in Europe and operate to destinations across Europe but focusing in key tourist markets.

The airline, codenamed Project Blue Sky, will be based in Germany, Austria and Switzerland.

Tui Group said “The leisure airline group will be supported by the expertise of Etihad Aviation Group, the fastest-growing aviation group in the world, and utilise TUI’s state-of-the-art distribution capacity. 

TUI AG, Etihad Aviation Group and Air Berlin PLC intend to finalise an in-principle agreement in due course. Any agreement entered into will be subject to all necessary corporate and regulatory approvals”

Industry experts however have been sceptical about the move with some stating that given the capacity that already exists with the likes of Ryanair and Easyjet, the market may not be there.

Ryanair’s chief executive Michael O’Leary said: “This is about the fifth restructuring we have seen of the German low-cost market.”

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