TUIfly eyes costs as it prepares to take back Air Berlin planes: HAZ

BERLIN (Reuters) - Tour operator TUI's airline TUIfly is seeking to cut its costs by at least 30 million euros ($36 million) as it prepares to take back aircraft it has leased out to insolvent Air Berlin's Austrian unit Niki, a German paper reported.

Some 20 million euros of savings are to come from more flexible working hours for its nearly 500 pilots, daily Hannoversche Allgemeine Zeitung said late on Monday, citing company sources.

TUIfly has leased out 14 of its planes, including crew, to Air Berlin's Austrian unit Niki, which is up for sale as part of a carve-up of Air Berlin.

"There is a chance that some aircraft and crew from that wet lease could fly for TUIfly again, increasing capacity. But such 'insourcing' would only work if we become more economical than we are now," a spokesman for TUI said on Tuesday but declined to comment on the scale of possible savings.

He said TUIfly's management and labour representatives were currently in "open, fair and constructive" talks.

TUI has been seeking options for TUIfly since plans to put it into a leisure-oriented venture with Niki and Etihad collapsed in June.

($1 = 0.8344 euros)

(Reporting by Klaus Lauer; writing by Maria Sheahan; editing by Jason Neely)