Here is another Etihad deal that the European aviation regulators should have a look at. The question, once again, is where does control lie.

That Darwin AIrlines was allowed to re-brand as Etihad Regional while arguing that Etihad has no day to day management of the company was nonsense. This may be the same.

Etihad is planning a new presence in the European tourism business in partnership with German travel company TUI.

It has approved a plan to create a new European leisure airline with a fleet of about 60 aircraft offering 15 million plane seats per year, serving the routes between the affluent centre of the continent and well-established holiday destinations in the Mediterranean.

The new airline is expected to be use the resources of Etihad Airways Partners – the seven-strong global alliance of airlines under the Etihad umbrella – and also of TUI to ensure a “lean overhead structure and competitive production cost”, a statement from the airline said.

When the deal is finally approved, Etihad will own 25 per cent of the new venture, with TUI holding a slightly smaller stake. Majority control of the new venture will rest with the existing owner, the private foundation Niki Privatstiftung.

The new leisure airline group, headquartered in Vienna, is scheduled to begin operations next April. The plan is to serve a broad network of destinations from Germany, Austria and Switzerland with airports at Hanover, Berlin, Düsseldorf, Cologne, Frankfurt, Stuttgart, Munich, Nuremberg, Baden-Baden, Hamburg, Basel and Vienna. Key markets will include the Balearics, Canaries, mainland Spain and Greece.

At the same time airberlin will exit the tourism trade to concentrate instead on scheduled short- and medium-haul operations in Europe, as well as an expansion of its long-haul business to include more transatlantic flights.

TUI includes the UK tourism groups Thomson Travel and First Choice.

The demands on management resources, time and capital from Etihad have to be significant as the group tries to turn its investments into self-sustaining profitable operations.

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