Today Bloomberg announced that Dubai’s flagship Airline Emirates was looking to take over the unprofitable national carrier Etihad. This would be creating the world’s biggest carrier by passengers. Why is this happening? Find out more by reading below!
Shocking news in the aviation world today! Four undisclosed people which are familiar with the matter have announced today that talks between Etihad & Emirates are at a preliminary stage in the discussion of EK buying the national carrier.
Both Airlines first declined to give any opinion on the subject before declining that any discussions are in progress. It’s pretty certain that none of the Airline expected to have this news in the international press by today. This deal would lead Emirates to probably become the biggest Airline in the world in regard of passenger figures. Though it is still possible to get the talks to fall through the experts said.
The enlarged operations of Emirates would probably detrone the American Airlines Group Inc., with a current market value of 19.2 billion USD.
After the failure in their alliance strategy between 2017 & 2018, Etihad reduced operations, leading to revenue loss. As you might remember the first big Etihad Partner Air Berlin collapsed last year while their second big partner Alitalia filed for bankruptcy protection. Beside that a massive slide in the price of the oil led to a reduction of travels in the UAE, leading to a drop in the Airlines finances. This is representing a 2-years loss of almost 3.5 billion $. Multiple studies are expecting Etihad to continue to loose money through 2022.
Although bringing both Airlines together wouldn’t be easy either as multiple routes would be duplicated, as both careers are for example flying to LHR or JFK. Beside that the Airlines would have to decide for a hub, as flying to 2 different airports is challenging due to connecting passengers. It is not yet known which airport might be kept in future, although predictions are more thinking about Abu Dhabi, as the space capacity is bigger by today.
Emirates is according to the IATA already the biggest Airline regarding world routes. In the overall they are ranking in fourth position. Merging EK & EY would lead them to overrule the American Market and being the world biggest Airline!