Etihad and TUI Group have ended talks on a joint venture to form a European leisure airline.

The joint venture would have seen the merger of the TUIfly airline with the leisure operations of Etihad part-owned carrier Air Berlin. Etihad would have bought 49.8 percent of Air Berlin’s leisure carrier NIKI which would then have been merged with TUIfly to form the new airline.

TUI executive board member Sebastian Ebel said “A strong European leisure airline continues to make great strategic sense… However, Niki is no longer available for a joint venture. We will push the repositioning of TUIfly further ahead in order to develop long-term prospects for the airline and its employees.”

TUI said it was still willing to contribute to reshaping the German aviation market and that it remains open to a partnership or joint venture.