Breaking: Emirates & Etihad Are In Merger Talks

For years there have been rumors of the possibility of a merger between Emirates and Etihad. The airlines have hubs that are only a short drive apart from one another, and Dubai’s new airport, Dubai World Central, is nearly halfway between Dubai and Abu Dhabi. While Emirates has done well financially, Etihad hasn’t, so one has to wonder what value they add.

Of course the other side of it is that there’s a lot of pride at stake, given the governments of Dubai vs. Abu Dhabi.

Up until now, rumors of the two airlines merging have always been dismissed, though most of us assumed it would happen eventually. It looks like that time may be sooner than we thought.

Bloomberg is reporting that Emirates is looking to take over Etihad, according to “people familiar with the matter.” The airlines are apparently in preliminary talks, and this would create the world’s largest airline by passenger traffic.

There’s not much other information as of now, so we’ll have to mark this as “developing” for now. It’s telling that Emirates is now looking to take over Etihad, though the big question is how receptive Abu Dhabi is to giving up their “own” airline.

(Tip of the hat to Evan)

Comments

  1. I’m curious to know how the new airline would look from a hard product perspective. I’d say I like the design and function of EY’s First Apartments over EK’s old F Suites. Haven’t tried EK’s new F, so can’t compare. Same for J – I prefer all of EY’s seats over the variations available on EK.

  2. Wonder what will happen to the Midfield terminal / airport under construction in Abu Dhabi?

    Will short-haul flights use it? Will Fly Dubai become Fly Abu Dhabi 🙂 in exchange for the merger?

  3. I used to fly Etihad Appartment in 2016 (paid as usual) but the service has gone downhill. Thus I avoid wasting money on Etihad First class nowadays. Emirates First is not my favourite either. I stick mostly to Oneworld airlines these days for my first class flights

  4. What value does Etihad offer? Are you aware that the emirate of Dubai essentially has no oil left, but the emirate of Abu Dhabi has mountains of it? Perhaps this is where the two airlines are on a more even footing?

  5. Update 9/20/18 10:26am ET: “There is no truth to this story,” an Etihad spokesperson told TPG.

    Update 9/20/18 10:24am ET: An Emirates spokesperson told TPG that “There’s no truth to this rumour.”

  6. Unsurprising. They seemed blithely unaware of the dramatic decline in the fortunes of Gulf Air ( which just 15 years ago was the dominant player). Too much ‘free’ money and not enough nous. In any event, consumers won’t be beneficiaries in any merger.

  7. @UK: I guess that it is preferable to Etihad disappearing altogether. Their global ambitions (Etihad partners) have certainly burned a hole through the wallet of whoever was financing Etihad.

    It will be interesting how a merger would end up looking like. I guess that Flydubai will be reoriented to cater to LCC as well as tertiary destinations (i.e. where there’s premium demand but not enough to justify sending a tripple seven). I could see Etihad going three ways within the EK Group:
    – A luxurious version of EK for specific destinations (e.g. what Lexus, Genesis, or Infiniti are to Toyota, Kia and Nissan respectively). EY would end up smaller
    – EY will be limited to provide flights to/from Abu Dhabi as opposed to copying EK’s model of catering mainly to transfer passengers.
    – EY disappears from the skies. Aircrafts, where possible, will be refitted with EK seating

    Either way a merger will be a quite significant blow to Abu Dhabi’s ambition to become a tourist destination.

  8. Update 9/20/18 10:47am ET: According to people familiar with the matter, Emirates would acquire the main airline business of Etihad, while the maintenance arm would stay with Etihad. The people said the negotiations could still fall through.

  9. @Endre… seems people are ignoring all your “I pay for first class” statements and that just does not seem right! You deserve their respect and admiration. Don’t put up with this! Find a few more ways to get it into the conversation. Try using capital letters like: “I’m glad it doesn’t affect me as “I ALWAYS PAY TO FLY FIRST CLASS!”

  10. @Endre
    What planet are you in? EK and EY are based in the Middle East so I can’t think of a single oneworld carrier that would offer a better F product. If you are from the Predators’ planet, I do apologize. 🙂

    Specifically:
    CX doesn’t even have true suites; BA has a glorified J product in F; both JL and MH are strong on the soft product but hard product isn’t impressive; QF has an average F product; and AA has one of the weakest F products out there.

    QR has a decent F product overall on A380 but the hard product isn’t even as nice as the new J QSuites, but more importantly, F on QR is only available on a handful routes. For the rest of the fleet, QR has an awful F product on A330-200 and A330-300 aircraft–these seats haven’t been changed in over a decade.

  11. With Lufthansa/Swiss/Austrian -Model this is a takeover that could work. The airlines would complement eachother on certain routes. Overlapping is inevitable. EK could take over the A380s from Etihad and EY could then have fleet based on the 787 & A350 while phasing out the A330s.
    I don’t see them wanting to give up those lucrative slots at LHR for example. EK has already taken over a slot from Etihad at CDG…

    Ofcourse both airlines will deny deny deny deny the story as expected but i think there’s sth solid to this. The full Bloomberg article is now online and makes much sense.

  12. @Sam
    EY only has 10 A380s vs. EK’s 105; Emirates will be calling all the shots on this merger… they are basically doing Etihad a favor.

  13. “I used to fly Etihad Appartment in 2016 (paid as usual)”

    They paid you to clean the toilet in the air? Nice job.

  14. @SQFirst
    I didn’t mean it any differently. That sub-fleet of A380s could be deployed only the London route or all go to EK where they would probably be better utilised.
    And yes, in the same way LH calls the shots in the Lufthansa group, so would Emirates here……see how loss making Austrian never gets any new planes while premium Swiss got some B77Ws delivered within a rather short period of time!

    Wasn’t it about 2wks ago or so that EK started hinting about having ‘thoughts’ on the B787-9?
    I wonder if that was meant for the ‘Emirates group incl. Etihad’ or just EK….

  15. @Sam
    OK but you have to understand the market… Austria isn’t as affluent as Switzerland and OS still has a fleet of 767 and 777s, so not like parent company LH just stuck them with terrible aircraft, haha. Also, to their credit, the OS 767s are in pretty decent shape.

  16. @SQFirst
    It was an example on who’s calling the shots. Carsten Spohr has repeatedly said that OS doesn’t get to expand & get new planes till they get profitable enough. This is what I’d expect from Emirates->Etihad. And look no further that MUC which is a very premium affluent market (catchment area compared to VIE) + LH’s excellent relationship with the airport – new planes and we pay the highest fares!!!!!

    Os got a 17yr old 777-200ER plane this spring! Their newest! Ha! Yes, Lufthansa planes are well maintained by i last flew an A321 whose seats felt like they were on their last days. I wonder how often these new thin covers on the Recaro seats have to be replaced and how much it costs.

  17. Both ceo and PR already denied the news from bloomberg. But then, its a matter of time. In the future i see all possibilities.

  18. Wait what?

    Emirates and Etihad combined carried ~80 million passengers.

    American Airlines alone carried ~200 million passengers.

    So Emirates+Etihad will NOT be the largest airline in the world by passenger traffic.

    It won’t even be the largest airline by international passenger numbers as that title goes to Ryanair.

    It might be the largest by ASKs.

  19. Say what! Nah. Endre could not pay to fly Ethiad’s Residence, but he settled for Ethiad Apartments. The shame he must have had. As Lucky once posted, sorry sir, but I work further up front in Residence. Let me get someone from you in the back working in Apartments. As in Endre’s case: you poor excuse of a small human, can’t you see that you are only in lowly Apartments. I am catering to the actual rich folks in Residence.

  20. Isn’t the obvious answer merge them, have Tim Clarke do his magic, and you’re done. It is suppose to be the UNITED Arab Emirates so I don’t know why all the Emiratis are so competitive with each other.

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