Thomas Cook Group has pulled out of talks about a potential merger of its airline Condor with Lufthansa’s Germanwings and TUIfly Germany.

The announcement was included in stock market trading updates from both Thomas Cook and TUI Travel .

Thomas Cook’s statement revealed: ‘It became clear that the opportunity was not attractive. Condor is a strong and profitable business with significant potential on a standalone basis.’

It added that Condor had delivered a ‘strong performance in a challenging environment for airlines’ this summer. This was largely thanks to axing unprofitable city routes, which resulted in a decline in overall capacity of 9%.

For winter 2008/09, Condor’s performance has been ‘robust’ but the fleet will still see cuts to ‘reinforce its position’ in both the tour operator and seat-only markets.

Talks about a merger between TUIfly and Germanwings started early in 2008, and Thomas Cook joined the negotiations after German carrier Air Berlin scrapped plans to buy Condor in July.

In a joint statement at the time, Air Berlin and Thomas Cook cited the ‘significantly changed economic framework conditions’ and in particular a doubling in the price of kerosene for the change of plan.

In August, Thomas Cook and TUI confirmed they were in talks with Lufthansa about potentially merging Condor, Germanwings and TUIfly Germany. And earlier this month, Thomas Cook group chief executive Manny Fontenla-Novoa said it looked promising that authorities would give the green light to the merger.

TUI said in its trading statement: ‘We can confirm that Thomas Cook Group plc have withdrawn from discussions with Lufthansa AG and ourselves regarding a potential merger of Condor, Germanwings and TUIfly. We continue to explore alternatives for our German airline operation and will update the market in due course.’

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