PARIS — Accor SA, which operates Raffles, Sofitel and Mercure Hotels, has withdrawn its plans to acquire a minority stake in Air France-KLM.

The hotel giant announced back in June that it was considering a strategic alliance with the airline group as a way to expand its range of travel services and better compete against online giants like Expedia and Booking.com. These plans included partnering with French and European investors to buy a 14.3% holding in Air France-KLM.

However, due to the fact that required conditions for the acquisition haven’t been met, Accor has decided not to further pursue its plans.

“AccorHotels remains convinced of the strong potential for value creation of strengthened ties between hoteliers and airlines. However, the group considers that conditions for taking a minority stake in Air France-KLM have not been met at this stage and has thus decided not to pursue further this opportunity,” the company said in a statement.

The airline group has been searching for a new CEO ever since Jean-Marc Janaillac’s sudden departure in May, reports Reuters. In an internal memo seen by Reuters, Anne-Marie Couderc, interim chairman of Air France-KLM, accuses AccorHotels for complicating the search for a new chief executive.

Accor announced its withdrawal amid news of a 4.2% increase in first-half operating profit. It forecasts a further rise in profits for the remainder of the year.