Maybe it's time for Emirates and Etihad to consider a merger - Arabianbusiness:
Who would have thought that two of the Middle East’s largest airlines, who have denied rumours of a merger for years, would release a joint statement? Then again, who would have predicted that a virus would wipe out $314bn in ticket sales in 2020?
In May, Emirates airline President Tim Clark and Etihad Airways CEO Tony Douglas warned that 85 percent of airlines globally face insolvency by the end of the year without government intervention.
It may have taken a global health pandemic, but maybe now is the time for the airlines to hook up. They already cooperate in aviation security, maintenance, repair, and overhaul (MRO) works. Emirates’ tie-up with Flydubai in terms has also kind of transformed into a de facto merger. So what is keeping them from creating the world’s biggest carrier by passenger traffic? Well it’s a little more complicated than it seems.
A win-win
On the one hand, a merger will help Etihad Airways cut its losses, which it managed to shrink from $1.52bn in 2017 to $1.28bn in 2018, extending the deficit over three years to $4.8bn thanks in no small part to investments in Alitalia, Air Berlin and India’s Jet Airways which turned sour. Emirates would also have to take on the Abu Dhabi carrier’s struggling load factor, having carried over a million passengers less in 2018 compared to 2017.
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