Update: 11th March 2017
In an interview with Bloomberg, Tim Clarke, the CEO of Emirates described as “nonsense”, the rumour that his airline and rival, Etihad were in talks over a possible merger.
Here’s an interesting rumour that has surfaced today. The German business publication, Handelsblatt, has claimed that the UAE’s two biggest airlines – Dubai-based Emirates and Etihad Airways of Abu Dhabi have started discussions about a possible merger.
Handelsblatt is citing two unnamed sources who have confirmed the rumour and are apparently familiar with the situation.
You may already be aware that this was the same publication that claimed Etihad and Lufthansa were in talks about merging into one mega-airline. In the end, the Etihad/Lufthansa rumour turned out to be a warming of relationships between the respective carriers to partake in maintenance and catering contracts.
It’s claimed that Sheikh’s from Dubai and Abu Dhabi have already met to discuss the merger. The deal between the two state-owned airlines could be an attempt to counter an increasingly difficult economic situation facing both carriers.
Emirates CEO, Tim Clark today spoke of a “gathering storm” at the ITB Berlin trade show and warned of the rising threat from low-cost competitors. Clark commented: “The dynamic is changing in the Middle East with regard to access to new markets,”
Under James Hogan, the soon to be departed CEO of Etihad, there was never any question that such a move could happen. Both airlines were said to be fierce rivals and the thought of Etihad and Emirates working together wasn’t even a topic up for discussion.
However, it’s already known that Etihad were looking at a change in business strategy following setbacks in its Etihad Airways Partners alliance. Losses at several airlines in which Etihad Airways own equity stakes have been keenly felt.
A move to merge the two carriers would be difficult but not beyond the realms of possibility. Most likely would be a scenario like the Air France-KLM group that see’s the business operating two distinct airline brands.
Both Emirates and Etihad have declined to comment on this latest speculation. It’s unlikely that either airline will give a running commentary on what business plans they plan to make.
