Etihad Airways, the flag carrier of Abu Dhabi purchases stake in Air Berlin, a German based airline. The agreement has made Etihad Airways the biggest shareholder in Air Berlin by taking over 29% of stakes followed by ESAS.

The flag carrier of Abu Dhabi, Etihad Airways has become the single largest shareholder in the German carrier by taking over 29% stakes in Air Berlin.

According to this deal announced on Monday, Etihad Airways will provide funds of approx $255 million (£162 million) for the fleet growth and network expansion at Air Berlin and will take two seats on the board of directors of Air Berlin in return. Moreover, this strategic move will also merge the airlines widespread networks under a codeshare agreement along with the frequent flyer programmes. Etihad will now be able to proffer travellers access to a total of 239 destinations across 77 nations.

Air Berlin is the second largest airline of Germany whereas Etihad Airways is the flag carrier of the UAE. Based at Abu Dhabi Airport, Etihad is probably the first name that pops in mind of those booking tickets for flights to Abu Dhabi.

Air Berlin CEO Hartmut Mehdorn was quoted in news reports as stating: “The strategic partnership with Etihad Airways opens up enormous opportunities for the future of our company.”

Etihad Airways now offers its guests a route network which is more than 80 destinations larger than the route network of any other Gulf carrier.

Etihad Airways Chief Executive Officer James Hogan said, “This new partnership expands our network reach, gives us access to 33 million new passengers, and provides us with a real opportunity for global growth. Through Air Berlin, we gain immediate access to a broad and complementary European market, with outstanding connectivity options for customers of both airlines.”

Etihad and Air Berlin will enter a code-share agreement; an anti-trust immunity will be sought to enable them to work together in the fields of services, sales and marketing.

Air Berlin has also decided to shift its Middle East operation from Dubai to Abu Dhabi and will offer flights to Abu Dhabi from Berlin four times a week. The service is sure to please many travellers seeking tickets on cheap flight to travel between the two cities.

Online sources reveal that as per the agreement, from January 15, 2012 Air Berlin will ply four A330-200 flights between Berlin and Abu Dhabi per week. European travellers will be able to access 29 flights per week to and through Abu Dhabi from four German hubs. The airline also plans to increase this frequency to 42 flights per week from mid-April. With the increase in flight frequency, budget travellers planning holidays will have a better chance to find cheap flights tickets.

Air Berlin’s website reveals that Etihad Guest and topbonus, the airlines frequent flyer programs, will be integrated, enabling passengers of both airlines to earn and burn on each other’s flights and offering reciprocal benefits – including status earning – to top tier members.

In order to take care of the cost efficiencies across the two companies, both Air Berlin and Etihad Airways have agreed to create a joint procurement team that will serve areas like fleet procurement and operation, maintenance, repair and overhaul (MRO) and other general procurements.

Up until now, Etihad Airways held a 2.99% stake in the German carrier. Pegasus Airlines parent company, ESAS remains the second biggest stakeholder in Air Berlin.

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