Air Berlin, TUI set for 'marriage of convenience'
The announcement appeared to end months of speculation over a consolidation of small German airlines behind number one Lufthansa.Berlin -- German airline Air Berlin and tourism giant TUI are to take cross shareholdings, the carrier said on Tuesday, in a sign of consolidation in the country's air transport sector.
An analyst dubbed the deal "a marriage of convenience" to cut costs.
TUI Travel, a subsidiary of the leading European tourism company, will own shares in the low-cost Air Berlin after new stock is issued, though the stake would remain below 20 percent, an Air Berlin statement said.
Air Berlin, the second biggest German airline, would take an "indirect participation" of the same order in TUIfly, another TUI unit, the statement added.
TUI confirmed it had held talks with Air Berlin but said there was "no assurance" the discussions would lead to a firm deal.
The announcement nonetheless appeared to end months of speculation over a consolidation of small German airlines behind number one Lufthansa.
Shares in Air Berlin gained 4.07 percent to 3.44 euros on Frankfurt's SDax index in midday trading as investors welcomed fresh prospects for the carrier.
Air Berlin would also take over regular service offered by TUIfly, leaving the latter to focus on its core charter air service, the statement said.
"It's a marriage of convenience," said Christian Goetz, an airline analyst for the regional German bank LBBW. "The priority is to reduce costs and surplus capacity."