Air Berlin is in advanced talks for a cross-shareholding with TUI Travel’s TUIfly.

Published: 19 Mar 2009

Air Berlin is in advanced talks for a cross-shareholding with TUI Travel’s TUIfly.

TUI said their boards still had to approve any agreement, though they didn’t specify when that would be.

A deal could lead to TUI Travel taking a stake in Air Berlin of not over 20 percent, while Air Berlin could get a 20 percent stake in TUI’s airline company, TUIfly. The proposed agreement calls for Air Berlin to take over TUIfly’s route network and operate TUI’s aircraft capacity through long-term contracts. TUIfly’s charter business would remain with TUI, the statement said.

The companies said any deal would be subject to approval from regulatory authorities.

TUIfly has 41 aircraft flying to destinations across Europe as well as to beach vacation spots such as the Canary Islands. Around 15 of the aircraft would now fly under Air Berlin’s banner, a person familiar with the matter told Reuters.

“In our view, this is a win-win situation. As a reminder, TUI has been searching for a partner for TUIfly since more than a year,” Equinet analysts said in a note.

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