TUI Travel PLC and Air Berlin PLC will form a long-term strategic partnership for their German flight operations. A respective agreement was signed yesterday, March 28, 2009. It stipulates an interlocking participation, where TUI Travel PLC takes a holding of 19.9 percent in Air Berlin PLC via a subsidiary and, vice versa, Air Berlin PLC acquires 19.9 percent of Hapag-Lloyd Fluggesellschaft mbH/TUIfly. The plan has already been agreed on by the supervisory committees of TUI AG and TUI Travel PLC. The plan, provided its sanction by the cartel authorities, is set to be put into action by October 1. Until then, nothing will change for the customers of the two air carriers. Only after the coming into effect of the agreement will the former TUIfly city routes be flown under flight numbers and product standards of Air Berlin. Marketing of the tourism-related operations will remain with TUIfly.
Pivotal component of the agreement is the transfer of all city business formerly conducted by TUIfly to the commercial responsibility of Air Berlin by the arrival of the winter flight plan of 2009/2010. Of the altogether 38 aircraft planned to be utilized by TUIfly from 2010 on, 17 will be chartered out to Air Berlin via long-term leasing agreements (wet lease, i.e. including crews). The remaining 21 aircraft will then be utilized for strictly tourism-related traffic of TUI Deutschland under the brand of TUIfly.
The benefits from TUI’s perspective:
Peter Long, CEO, TUI Travel PLC:
“I am glad that we reached an agreement that helps not only our German organizers, but also our colleagues at TUIfly, who have continued to show excellent performance despite the instable situation. I am looking forward to a successful strategic partnership with Air Berlin.”
Volker Böttcher, member of the board of TUI Travel PLC (responsible for Central Europe):
“For the employees at TUIfly, the alliance with Air Berlin is the ideal solution. This way, the air carrier’s main share remains with the TUI corporation and few jobs will need to be cut. In these times, especially, this cannot be valued enough.”
The benefits from Air Berlin’s perspective:
Joachim Hunold, CEO, Air Berlin:
“This strategic alliance gives Air Berlin access to three economically highly interesting markets: Cologne, Stuttgart and Italy. This allows Air Berlin to expand its route network in Europe and within Germany, which is of great significance, especially for the corporate business. At the same time, it betters the position of TUIfly and Air Berlin in the challenging economic environment.”
Both companies will be strengthened by their interweavement under corporate law, allowing them to further establish their position in a consolidated European air transportation market.
