Little Chance For Merger Of Smaller German Airlines

September 4, 2008 4:23 p.m. EST

Berlin, Germany (AHN) - The potential merger of no-frills carriers Germanwings, Condor and TUIfly may never takeoff.

According to the Financial Times Deutschland, the merger talks are on the verge of collapsing.

The move to consolidate operations of smaller air carriers was prompted by rising aviation fuel cost and lesser passengers.

Air Berlin and Thomas Cook, which owns Condor, had discussions for Air Berlin to acquire a $480 million stake in Condor. However, Air Berlin backed out of the deal in July, prompting Thomas Cook to join the merger talk which started end of August.

Despite the rising cost of air travel, Germany's aviation industry nevertheless managed tostay afloat financially.

For the first half of 2008, Germany's international air traffic reached 46.2 billion passengers or a 0.2 percent decline, while domestic air traffic grew by a healthy 6.6 percent.

For the 2nd quarter of 2008, Air Berlin posted a net profit of $12.26 million (8.3 million euro), which was an improvement from its year-ago loss of $85 million (59.3 million euro).