Emirates, flydubai to fly in tandem, but it's not a merger

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Emirates, flydubai to fly in tandem, but its not a merger

Both airlines will continue to be managed independently


Bernd Debusmann Jr.

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Published: Mon 17 Jul 2017, 10:09 AM

Last updated: Sat 22 Jul 2017, 7:45 AM

Emirates Airline and flydubai have announced a extensive partnership which will see the two Dubai-based carriers come together to align their systems and provide passengers access with easy connectivity to each other's networks and ensure a smooth travel experience.
Apart from code-sharing, the partnership includes integrated network collaboration with coordinated scheduling, allowing flydubai customers to take advantage of Emirates worldwide destinations across six continents. Emirates' customers, for their part, will now have access to flydubai's regional network.
Both airlines plan to develop their hub at Dubai International Airport (DXB) by aligning their operations to ensure a seamless travel experience at the airport, currently the world's busiest for international passengers.
"This is an exciting and significant development for Emirates, flydubai, and Dubai aviation. Both airlines have grown independently and successfully over the years, and this new partnership will unlock the immense value that the complementary models of both companies can bring to consumers, each airline, and to Dubai," said Sheikh Ahmed bin Saeed Al Maktoum, Chairman and Chief Executive of Emirates airline and Group and Chairman of flydubai.
Emirates currently has a wide-body fleet of 259 aircraft which fly to 157 destinations - including 16 cargo-only points, while flydubai operates 58 new-generation Boeing 737 aircraft, which fly to 95 destinations. Combined, the two airlines currently fly to 216 unique destinations with a combined fleet of 317 aircraft, with more than 300 on order between the two.
According to the statement, by 2022 the combined fleet will be comprised of 380 aircraft, flying to 240 destinations, with the airlines working to optimize their networks and schedules to allow for new city-pair connections and provide more choices to consumers.
Additionally, the move will help both airlines feed traffic into each other's complementary networks, and the two are working together on a number of initiatives including network planning, airport operations, 'customer journey' and frequent flyer programmes alignment.
The partnership is expected to be rolled out over the coming months, with the first code-sharing arrangements to be unveiled in the fourth quarter of 2017.
What does this mean for the airlines?
Independent aviation consultant John Strickland told Reuters that "the biggest benefit the two airlines can achieve will be to develop network complementarily, reducing some current duplication and providing new customer iteneraries."
"There will be greater flexibility on aircraft size also according to demand on a given route," he added.
"It has taken a long time for Emirates and flydubai to deepen their relationship this way, given their synergies from Chairman downwards," Saj Ahmad, an analyst with the London-based StrategicAero Research, told Khaleej Times. "Both airlines are currently the biggest operators out of Dubai International and can harness immense cost savings by working together. This is in spite of flydubai shifting some of its operations to Dubai World Central later this year."
Additionally, Ahmad noted that the agreement means that the two airlines can tap into each other's networks without the need to purchase additional aircraft.
"Given the competitive profit pressure Emirates has faced due to falling prices, lower oil costs and increased airline competition, Emirates can leverage the strength of flydubai's network and dispense the need to buy their own narrow-bodies," he said. "Vice versa, flydubai can offer flights on Emirates' network without buying wide-bodies."
Ahmad predicted that the agreement will "make life difficult" for competitors such as Etihad and Air Arabia, as well as "fringe" carriers such as Saudi low-cost carrier Flynas, Oman's Salam Air, and Kuwait's Jazeera Airways.
"When Emirates also shifts to DWC, the partnership with flydubai will catapult both airlines forward given the robust demand pull that Dubai has - this is why the current airport is the biggest in the world and that performance shows no sign of slowing down," he noted. "All in, this move was a very long time in the making and its one that passengers across the GCC and beyond will embrace with open arms."
Emirates at a glance
-Aircraft: 259
-Destinations: 157 (six cargo-only points)
-Total 2016/2017 revenue (for financial year ending March 31st, 2017): Dh85.1 billion ($23.2 billion)
-Total 2016/2017 profit (for financial year ending March 31st, 2017): Dh1.3 billion ($340 million)
-Total 2016/2017 passenger numbers (for financial year ending March 31st, 2017): 56.1 million (up 8 percent)

flydubai at a glance
-Aircraft: 58, with over 100 more expected by 2023
-Destinations: 95
-Total 2016 revenue: Dh5 billion ($1.37 billion)
-Total 2016 profit: Dh31.6 million ($8.6 billion)
-Total 2016 passengers: 10.4 million (14.4 percent growth over the previous year)

The airlines combined
-Current combined network is 216 destinations
-Current combined fleet is 317 aircraft
-2022 expected combined fleet: 380 aircraft
-2022 expected combined network: 240 destinations
Emirates, flydubai to share more synergies

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