Are Emirates and Etihad Merging?
The UAE is home to two of the world's most successful airlines, based just 70km from each other.
Emirates, based in Dubai and Etihad in Abu Dhabi, specialize in long haul flights to almost every destination on Earth. However, due to their close proximity, along with external factors such as energy prices and the emergence of budget airlines, it seems as the two giants may become one.
It has been reported internationally that the possibility of a merger between the UAE's two major airlines is being discussed. Handelsblatt, a European Business Daily news has reported that the ruling families have met to discuss a merger. Falling profits, along with a changing industry with an uncertain future are cited as the reasons behind the discussions, although neither Etihad or Emirates have confirmed the reports.
This week, the CEO of Emirates Tim Clark, hinted at a 'gathering storm' in the premium airline industry. He discussed the major factors facing airlines like Emirates, such as competition from low-cost airlines who are now offering both international routes and long haul flights at competitive rates. He also spoke about political issues such as President Trump's recent travel ban, which saw a 25% decrease in sales for the carrier.
This is not the first time rumours of a merger have been discussed. The financial crisis of 2008 had many discussing the possibility of a merger, which time discredited. While there is no concrete news as yet, it is clear that times are tough for the airline industry, and a merger is definitely a possibility.
Do you think they'll merge?