Lufthansa has submitted a letter of interest in Air Berlin's Niki unit and other parts of the insolvent carrier, a source familiar with the talks said today.

Air Berlin, which is being kept in the air thanks to a €150 million government loan, has been in talks with interested parties since last week when it filed for insolvency after major shareholder, Gulf carrier Etihad, said it would no longer provide funding.

Part of Air Berlin's appeal to bidders lies in its access to take-off and landing slots at airports such as Duesseldorf, in Germany's most populous region.

As part of a restructuring this year, Air Berlin transferred leisure routes to tourist destinations in Spain and Greece to its Austria-based unit Niki, founded by former F1 driver Niki Lauda

Lufthansa said in a statement this evening it reaffirmed that it was keen to absorb part of Air Berlin. "The interest in a takeover of parts of Air Berlin Group was reinforced with a termsheet presented today," Lufthansa said.

As part of a restructuring this year, Air Berlin transferred leisure routes to tourist destinations in Spain and Greece to its Austria-based unit Niki, founded by former F1 driver Niki Lauda. Analysts at Goodbody said buying Niki would strengthen Lufthansa's position against Ryanair on such routes.

For 2017, Lufthansa Group, including budget unit Eurowings, has a market share of about 22.4 percent on Germany-Spain routes, against 16.4% for Ryanair.

Lufthansa is unlikely to be able to buy all of Air Berlin for competition reasons. Together the two would control around 95% of German domestic routes, for example.

Ryanair CEO Michael O'Leary told Reuters on Tuesday he would be interested in a bid for Air Berlin as a whole, but complained Ryanair hadn't been invited to the process, which he sees as heavily favouring Lufthansa.

German aviation investor Hans Rudolf Woehrl, who wants to buy Air Berlin as a whole, has also criticised the process, saying he was not invited to bid.

Another source familiar with the matter said Thomas Cook's German airline Condor is also part of the negotiations. It was not immediately clear which assets Condor was interested in.

EasyJet is also said to be weighing up Air Berlin's assets.

TUI said it was involved but only in those talks that relate to 14 planes that its TUIfly unit rents to Air Berlin. TUI has been seeking options for TUIfly since plans to put it into a leisure-oriented venture with Niki and Etihad collapsed in June.

Thomas Cook, Lufthansa and easyJet declined to comment.

Any sale will be decided by a creditor committee, which met for the first time today and includes representatives from Air Berlin, the federal labour office which is paying staff wages, Commerzbank, and Eurowings.