Airline deal ditched

GULF carrier Etihad Airways has abandoned plans to create a new airline with the owner of Thomson and First Choice in Germany.

The Abu Dhabi-based airline was due to combine part of its Air Berlin business with Tui, but has now walked away from talks.

A source close to the matter said Etihad had ended the tie- up because it wants to make a move in Germany via its existing stakes in Air Berlin and Austrian airline Niki.

Sources yesterday said the economics did not stack up.

Tui said it remained open to a deal with another carrier.