Travel firms TUI Travel and Thomas Cook are both in talks with German operator Lufthansa about merging some of their airline units, according to a report.
Negotiations relate to the possible merger of TUIfly Germany, Condor and Germanwings, reports AFP.
The new agency reports that TUI said in statement that the companies were in "early discussions" but that no commercial terms had yet been agreed and it was not certain if any "transaction will result".
In related news, Thomas Cook has claimed it has resolved problems with service at its call centres after complaints about quality of service and the number of people who had to wait for calls to be answered, according to Travel Trade Gazette.
Commercial relations director Marc Bennett said: "Our service has now improved well beyond what we were offering before and we are answering calls quicker than before the merger."
Thomas Cook merged with MyTravel last year, according to the BBC. At the time the BBC reported that the merger could result in cost savings of £75m a year across the businesses.
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