(Corrects third paragraph to read "...leased from TUIfly...
instead of "operated on behalf of TUIfly...")
* Air Berlin in talks with TUI, Etihad
* Move seen as major restructuring step
* Shares up 3.2 percent
FRANKFURT/ABU DHABI, Oct 5 Lossmaking Air Berlin
, Germany's second biggest airline, is in talks to merge
its leisure travel business with that of travel and tourism
giant TUI's German airline TUIfly, the airline said on
Air Berlin, which has made a net loss in seven of the last
eight years, is trying to expand its long-haul operation and
attract more higher-paying business customers.
It said on Wednesday it was joining talks between major
shareholder Etihad and TUI about the combination with TUIfly of
Air Berlin's tourist business, which has 35 aircraft including
14 already leased from TUIfly.
Shares in Air Berlin were up 3.7 percent at 0.71 euros by
0830 GMT, when TUI's London-listed shares were down 0.6 percent
at 1127 pence.
In a separate statement Etihad Aviation Group, which holds
29.2 percent of Air Berlin, confirmed its was in talks with TUI
"to create a strong European leisure airline group, focused on
point-to-point flying to connect key tourist markets".
"This new airline group would serve a broad network of
destinations from Germany, Austria and Switzerland," it added.
Industry sources had told Reuters last week that Air Berlin
was in talks over a broad restructuring that could halve its
fleet and cut 1,000 mainly sales and marketing jobs to shore up
its finances and restore profitability.
"The prospective transaction will be subject to successful
negotiations and to all necessary corporate and regulatory
approvals," Air Berlin said.
(Reporting by Harro ten Wolde and Christoph Steitz and Stanley
Carvalho.; Editing by Jane Merriman and Georgina Prodhan)