Sir Tim Clark, president of Dubai-based Emirates has yet again discounted the likelihood that the airline might merge or even acquire Etihad Airways which is based just seventy miles away in Abu Dhabi. There have seen many high profile rumors in recent years that the 2 carriers were involved in merger talks. But thus far any cooperation has been limited to sharing very specific back-office functions.
Rumors of a possible merger largely came to prominence due to Etihad’s financial difficulties. And the belief that there simply wasn’t enough demand for two airlines pursuing the same market of passengers. The heavily loss-making airline had also embarked on a disastrous equity investment scheme that ended with the carrier recording a $4.7 billion loss over 3 years.
“Etihad is a much leaner airline than it was three or four years ago, and it’s far more fit for purpose than perhaps it was,” commented Sir Tim in a recent interview. The implication being that any need to merge the 2 airlines no longer existed.
Chief executive Tony Douglas has dramatically scaled back Etihad’s ambitions and is setting out to pursue a different strategy than that of Emirates and regional competitor Qatar Airways.
“Etihad was improving its situation. It wasn’t a very good situation however it was getting better. Emirates was on a roll-up till Jan, we were going to finish one of our best financial years,” he said. “So if you remove COVID, where were we? we were both getting on with our jobs,” Clark continued.
Sir Tim did, however, concede that any final decision wouldn’t be his to make but rather the rulers of Dubai and Abu Dhabi.
“The 2 remain ultra-competitive. my very own view is that they’re both good and will be strong enough to remain separate, operate as competitors, and do the right thing for the population of the UAE, and also be very good in what they do in the international market,” Clark said of the competition between Emirates and Etihad.
“If you can get through the next couple of years then there’s a fighting chance of things being fine.” If however, the COVID-19 pandemic disrupts demand for air travel longer than just a few years. Then maybe we might be revisiting the idea of Emirates and Etihad merging all over once more.