To say Air Berlin hasn’t been doing well financially might be a bit of an understatement.
The airline has posted a loss every year since 2008 (except 2012, when they made a net profit from the sale selling a 70% share of their frequent flyer program Top Bonus to Etihad). They sold a 29% stake to Etihad in 2011, making Etihad the largest shareholder of Air Berlin. Earlier this year, Air Berlin agreed to wet lease 40 aircraft to Lufthansa’s Eurowing division, effectively operating flights for them.
In another “bailout” type transaction, Etihad recently announced that will be buying Air Berlin’s indirect stake in Niki, the low-cost carrier based in Vienna. This deal is a joint venture between Etihad and TUI Group, the largest tourism operator in Europe.
Air Berlin will get ~300 million Euros from the sale of their sake, which will help improve the airline’s financial situation. For reference, the market cap of Air Berlin is ~69 million Euros as of this writing. This deal was approved in late November by the supervisory board of TUI Group. Today, Etihad’s board approved the joint venture, and the transaction is now awaiting approval from anti-trust and regulatory authorities.
Etihad and TUI Group plan to establish a new leisure airline with their investment, which will begin operations in April 2017. TUI will be contributing their own fleet of 14 aircraft from TUIfly, which they are currently operating for Air Berlin under wet lease. The new airline will fly out of key cities in Germany, Austria, and Switzerland, with key destinations in the Canaries, mainland Spain, Greece, and the Balearics. Meanwhile, Air Berlin is hoping this sale can help them re-group their business, as they attempt to switch their focus to long-haul flights, which are more profitable for them.
I’m not sure whether Niki will retain its name and branding, but Etihad says that they will share more regarding their plans once the negotiations are finalized.
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